Christopher Wray, the director of the Federal Bureau of Investigation, said fiat was a more likely way for Russia to evade sanctions, given the United States’ ability to block efforts using crypto.
In a Thursday hearing of the Senate Select Committee on Intelligence, New Mexico Senator Martin Heinrich early the FBI director like Russia could respond to the economic impact of banning the United States’ oil and gas imports by using gold reserves, Chinese currency or cryptocurrency. Director Wray said the FBI and its partners “have built up significant expertise” in digital assets, citing the department’s recent work in confiscating large amounts of tokens as evidence of vulnerabilities in the use of digital assets. crypto to evade sanctions.
“The Russians’ ability to circumvent the sanctions with cryptocurrency is likely to be greatly overestimated by them and others,” Wray said. “We, as a community and with our partners abroad, are much more effective at that than I think they sometimes appreciate and there is a lot of expertise in tools and strategies to help block that kind of effort. Ultimately, what they really need to do is access some form of fiat currency, which becomes more challenging.”
FBI Director Christopher Wray Addresses Senate Intelligence Committee
Director of National Intelligence Avril Haines added that Russian President Vladimir Putin probably anticipated sanctions from his actions against Ukraine and built up a reserve fund to mitigate the economic impact. However, she said the US Treasury Department and other foreign governments that imposed sanctions on Russia had made it difficult to access the funds.
Related: Experts Reject Concerns That Russia Will Use Crypto To Circumvent Sanctions: ‘Totally Unfounded’
Following Russia’s military actions on February 24, the United States and governments across the European Union announced sanctions designed to financially damage the country. Many agencies and departments, including the US Financial Crimes Enforcement Network and the European Commission, said they would look into the possibility of Russia using digital currencies to evade sanctions. US President Joe Biden also signed an executive order on Wednesday aimed at creating a regulatory framework for crypto that lists the risks of circumventing sanctions.