Elizabeth Rosenberg, Assistant Secretary for Terrorist Financing and Financial Crime at the U.S. Treasury Department, suggested that sanctions against cryptocurrency mixers could help heighten the government’s response to foreign entities attempting to use digital assets for illegal purposes.
At a Senate Banking Committee hearing Tuesday on Russia sanctions, Rosenberg said the Treasury Department’s addition of crypto mixers like Blender.io or Tornado Cash to its list of specially designated citizens could be an effective way to signal that The US government is acting against preventing entities from circumventing sanctions.
“When [sanctions] can serve as a deterrent to any criminal who tries to use the mixer to launder their funds. […] it is an effective way we can use to show that we cannot tolerate money laundering,” Rosenberg said. “Be it for a Russian criminal figure, an Iranian, a North Korean, or wherever they come from.”
“Technologies to increase anonymity, such as mixers […] are indeed a challenge to understand and combat the flow of illicit finance.”
Elizabeth Rosenberg speaks before the US Senate Banking Committee on Tuesday
Rosenberg responded to questions from Massachusetts Senator Elizabeth Warren, who said some in the crypto space were “furious” at Treasury sanctions on mixers and suggested that Russian oligarchs could use digital assets to avoid efforts aimed at economic impact on individuals and legal entities associated with the war in Ukraine. Many in the space have criticized the actions of the Treasury Department, including Coinbase — the cryptocurrency exchange announced on Sept. 8 that it will be funding a lawsuit against a government agency challenging Tornado Cash sanctions.
Related: US Treasury Sanctions Iran-based Ransomware Group and Related Bitcoin Addresses
In addition to blenders including Blender.io and Tornado Cash, in September the Treasury Department targeted specific bitcoin (BTC) addresses allegedly linked to individuals from a Russian neo-Nazi paramilitary group and an Iran-based ransomware group. Amid criticism and uncertainty among cryptocurrency users, the Treasury Department later clarified that no one was barred from posting the Tornado Cash code on websites or publications.