With help from Derek Robertson
How are governments supposed to stop cryptocurrencies from being used to circumvent the rules?
Tensions are rising as regulators pay more and more attention to the technology. One example is Treasury sanctions Tornado Cash is a decentralized protocol that obscures the provenance of cryptographic tokens. recently, news of arrest Suspected Tornado Cash developer in the Netherlands and its possibility legal objection to Washington’s sanctions.
But that ongoing commotion distracts from another development affecting cryptocurrency compliance: Iran appears to be openly using cryptocurrencies to evade U.S. sanctions.
Last week, Iranian state media said: Tweet Reported by a senior trade official that the country’s government has purchased $10 million worth of imports using cryptocurrencies, with plans to make cryptocurrencies and smart contracts more widely available by the end of September. By exchanging value through cryptocurrency networks, Iran can circumvent traditional banking systems that block illicit international transactions.
To make sense of this news, I turn to Richard Goldberg, a former member of the National Security Council for Iran and now a senior adviser to the Washington think tank Foundation for the Defense of Democracy, who supports a hard line on Iran. I heard the story.
This is not the first time cryptography has been used to evade sanctions. What is the difference in this development?
“This is the most direct and head-on insult to US sanctions by any administration that has ever used cryptocurrencies,” Goldberg said.
What’s the point of advertising it if you’re trying to evade sanctions?
“As a test case,” he said. “What they want to see is what the US will do in response? How will Europe respond to this?”
In recent months, Goldberg has in the midst of uncertainty On future changes in US-Iran relations, he observed that the Iranian government is stepping up efforts to position itself to survive the lengthy sanctions.
In addition to rising oil prices, some relaxation of sanctions As the Biden administration seeks to revive a nuclear deal that was abandoned under Donald Trump, he said, the Iranian government is giving room to withdraw subsidies to sanction-ravaged industries.
Cryptocurrencies offer another potential tool in the financial war against the United States and its allies.
What does this mean for the industry?
As the Tornado Cash sanctions show, the Treasury has already stepped up its crypto-related enforcement. Last month, The New York Times reported that the Treasury Department was investigating cryptocurrency exchange Kraken. Possible Violation Possible Iran sanctions and possible fines.
Goldberg, also hosted by Crypto-themed podcast, “Cryptonite,” expects the Iranian news to only add to the Treasury Department’s determination. As a result, he predicts, crypto businesses will have to invest more in the kinds of compliance programs that exist at other big financial institutions.
“I am sure they have sufficient funds to find different technical situations to mitigate sanctions evasion,” he said. “We can’t eliminate it, but we can mitigate it.”
The more money you put into developing the metaverse,, more traditional institutions are paying attention — including the Commodity Futures Trading Commission, one of its commissioners, Caroline Pham, yesterday hosted by the Technology Policy Institute on “Is the Metaverse and Web 3.0 Real? Or is it hype?” What are the policy issues? ”
Pham showed that the technology is still in its infancy, but that top regulators are paying close attention (although, as she pointed out, she does not represent the CFTC, I spoke for myself). As for the potential entanglement of crypto and the metaverse, when it comes to creating a lasting sense of digital property, she said, “Web3 really taps into that potential,” she said. Regarding the safety and regulation of the Metaverse, she expressed concerns familiar to Hill about the potential for new forms of harassment. says it is “extremely concerned” about the national security risks it poses in virtual worlds armed with its own currency.
She also went back and forth with crypto-skeptical American University professor Hilary Allen defending the agency’s track record in regulating cryptocurrencies.
Noting that the CFTC has already taken more than 50 enforcement actions against cryptocurrency companies, she said, “Anyone who thinks the CFTC will touch regulation lightly,” and “responsible innovation.” misunderstood its mission to promote laissez-faire approach. — Derek Robertson
Empty (or not) bank accounts for losing campaigns Who needs or wants a repayment, whether the candidate keeps some money in the vault for future ambitions.
When outgoing Rep. Madison Cawthorne (RN.C.) published his paper Recent disclosure, which contained one peculiar detail. The 27-year-old very online, who lost his seat in the Republican primary in May, is still Holds somewhere between $150,000 and $350,000 Ethereum cryptocurrency, and indeterminate amount of Let’s Go Brandon Coin — Anti-Biden”meme coinstarted trading last November and even tried (and failed) to sponsor a NASCAR driver of the same name.
Perhaps Cawthorn’s campaign, like everyone else, is steeped in its Ether holdings. Experienced Little rally of the month. About Let’s Go Brandon Coin: Most cryptocurrency platforms stopped tracking months ago. At that time, its value plummeted to a fraction of the all-time high of a penny. (Earlier this year, Cawthorn became the subject of an investigation by Cryptoworld, revealing that he Pump and dump method for coins of little value).
Cawthorn’s campaign ends with what’s still in the coffers. At the very least, it’s a memento of the frenetic period of late 2021 and early 2022. super bowl commercial Promising a path to crypto wealth, viral videos There were a lot of “let’s go Brandon” chants. Cawthorn, like many other crypto investors, found himself off the roller coaster and lightening his pockets a bit. — Derek Robertson
Stay in touch with the entire team: Ben Schlekinger ([email protected]); Derek Robertson ([email protected]); Constantine Cacaes ([email protected]); When Heidi Vogt ([email protected]).follow us @Digital Future on Twitter.
Ben Schreckinger is responsible for technical, financial and political affairs at POLITICO. He is a cryptocurrency investor.
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