[Congressional Record Volume 168, Number 150 (Monday, September 19, 2022)]
[House]
[Pages H7904-H7906]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
RUSSIA CRYPTOCURRENCY TRANSPARENCY ACT
Mr. MALINOWSKI. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 7338) to require congressional notification prior to
payments of Department of State rewards using cryptocurrencies,
authorize the appointment of a Director of Digital Currency Security in
the Office of Economic Sanctions Policy and Implementation of the
Department of State, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 7338
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Russia Cryptocurrency
Transparency Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) On February 24, 2022, the Government of the Russian
Federation, led by Vladimir Putin, launched an unprovoked,
full-scale invasion of Ukraine.
(2) This unprovoked act of aggression violates Ukraine's
right to independence, sovereignty, and territorial
integrity, and constitutes an emergency in international
relations.
(3) The invasion by the Government of the Russian
Federation of Ukraine caused significant displacement in
Ukraine and triggered a broader humanitarian crisis in
Europe.
(4) On March 23, 2022, the Department of State released a
statement assessing that the Russian Armed Forces committed
war crimes by launching indiscriminate attacks on civilians
and non-military infrastructure, including apartment
buildings, schools, and hospitals, leaving thousands of
innocent civilians killed or wounded.
(5) The United Nations Office for Coordination of
Humanitarian Affairs has projected that, over the next three
months, 12,000,000 people living in Ukraine will need
humanitarian assistance, 6,700,000 people will be internally
displaced, and 4,000,000 people will flee Ukraine.
(6) Rapid humanitarian assistance is necessary 6 across
sectors to address the needs of refugees and internally
displaced persons from Ukraine.
(7) Cryptocurrency has been used as an effective cross-
border payment tool to send millions to the Ukrainian
Government, Ukrainian army, and Ukrainian refugees with
limited access to financial services.
(8) In response to the war of aggression by the Government
of the Russian Federation, the United States has imposed an
array of sanctions, cutting off major Russian financial
institutions from Western markets and freezing the assets of
numerous Russian oligarchs.
(9) Given that regimes sanctioned by the United States have
used cryptocurrencies to evade sanctions, there are
increasing concerns that these digital assets may be used to
circumvent the sanctions now imposed on Russia and Belarus by
the United States and other foreign countries.
SEC. 3. CONGRESSIONAL NOTIFICATIONS FOR STATE DEPARTMENT
CRYPTOCURRENCY REWARDS.
(a) Congressional Notification.--Subsection (e) of section
36 of the State Department Basic Authorities Act of 1956 (22
U.S.C. 2708) is amended by adding at the end the following
new paragraph:
[[Page H7905]]
``(7) The Secretary of State shall notify the appropriate
congressional committees not later than 15 days before paying
out a reward in cryptocurrency.''.
(b) Report.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of State shall submit to
the appropriate congressional committees a report on the use
of cryptocurrency as a part of the Department of State
Rewards program that--
(1) explains why the Department of State made the
determination to pay out rewards in cryptocurrency;
(2) lists each cryptocurrency payment already provided by
the State Department;
(3) provides evidence as to why cryptocurrency payments
would be more likely to induce whistleblowers to come forward
with information than rewards paid out in United States
dollars or other prizes;
(4) analyzes how the State Department's use of
cryptocurrency could undermine the dollar's status as the
global reserve currency; and
(5) examines if the State Department's use of
cryptocurrency could provide bad actors with additional hard-
to-trace funds that could be used for criminal or illicit
purposes.
(c) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Committee on Foreign Affairs of the House of
Representatives;
(2) the Committee on Foreign Relations of the Senate.
SEC. 4. REPORT ON BLOCKCHAIN USAGE FOR UKRANIAN HUMANITARIAN
NEEDS.
(a) In General.--Not later than 30 days after the date of
the enactment of this Act, the Secretary of State, in
coordination with the Secretary of the Treasury and the
Administrator of the United States Agency for International
Development, shall submit to the appropriate congressional
committees a report on the most effective avenues to promote
economic development and provide humanitarian aid to Ukraine,
including possible uses of cryptocurrencies or other
technologies incorporating blockchains. Such report shall--
(1) review and analyze the advantages offered by cross-
border transactions involving digital assets relative to
other traditional avenues for cross-border humanitarian
relief payments and the reasons for those advantages,
including structural barriers which may impact the cost,
efficiency, and reliability of traditional payment channels;
and
(2) also review and analyze ways in which technologies
incorporating blockchains can--
(A) assist in the care, support, or resettlement of
refugees and internally displaced persons from Ukraine;
(B) address humanitarian access challenges and ensure the
effective delivery of such assistance to persons from
Ukraine;
(C) increase efficiency, accountability, and transparency
in the administration of humanitarian aid provided by the
United States to persons from Ukraine;
(D) prevent corruption through the use of ``web3''
technologies;
(E) improve access to capital; and
(F) bolster the efficiency and reliability of cross-border
remittances.
(b) Form.--The report required under subsection (a) shall
be submitted in unclassified form and may include a
classified annex.
(c) Appropriate Congressional Committees Defined.--In this
section, the term ``appropriate congressional committees''
means--
(1) the Committee on Foreign Affairs and the Committee on
Financial Services of the House of Representatives; and
(2) the Committee on Foreign Relations and the Committee on
Banking, Housing, and Urban Affairs of the Senate.
SEC. 5. EFFECTIVENESS AND ENFORCEMENT OF SANCTIONS.
(a) Sense of Congress.--It is the sense of Congress that--
(1) on March 9, 2022, President Biden issued an Executive
Order outlining a national policy to mitigate the risks, and
harness the potential benefits of, digital assets and
distributed ledger technology;
(2) the growing development and adoption of digital assets
have created an urgent need for the United States to play a
leading role in the global financial system and facilitate
technological innovation;
(3) these developments have had significant implications
that pose risks to the financial stability and national
security interest of the United States, including issues
relating to privacy and surveillance;
(1) the United States Government must--
(A) ensure the efficacy and enforcement of the United
States' sanctions regime by preventing the misuse of digital
assets, which can facilitate transactions by Russian persons
subject to sanctions;
(B) mitigate national security liabilities and systemic
financial risks posed by the misuse of digital assets by
developing policy recommendations and addressing existing
regulatory gaps; and
(C) maintain technological leadership to promote United
States global competitiveness and play a leading role in the
global governance of digital assets.
(b) Report.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the Secretary of the Treasury, in
consultation with the Secretary of State, shall submit a
report to the appropriate congressional committees that
provides an assessment on how digital currencies affect the
effectiveness and enforcement of United States sanctions
against the Russian Federation and actors subject to
sanctions related to the Russian Federation's invasion of
Ukraine.
(2) Matters to be included.--The report under paragraph (1)
shall--
(A) describe any efforts by the Russian Federation or
persons subject to sanctions related to the Russian
Federation's invasion of Ukraine to utilize digital assets to
evade the sanctions regimes of the United States and its
international allies and partners;
(B) describe any efforts by persons subject to sanctions
related to the Russian Federation's invasion of Ukraine to
use decentralized finance technology or other similar
technology to effect transactions, including digital wallets,
digital asset trading platforms, and digital asset exchanges;
(C) assess how the use or adoption of digital currencies
could undermine the national security interests of the United
States and impact the efficacy and enforcement of sanctions,
, and the enforcement of anti-money laundering provisions;
(D) detail actions taken by the United States government to
work with private sector actors to combat the evasion of
sanctions imposed by the United States; and
(E) include recommendations for new legislative and
regulatory measures needed to strengthen the United States
Government's ability to prevent any states, state-sponsored
actors, and non-state-sponsored actors from using digital
currencies to evade sanctions imposed by the United States
Government.
(c) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Committee on Foreign Affairs of the House of
Representatives;
(2) the Committee on Financial Services of the House of
Representatives;
(3) the Committee on Foreign Relations of the Senate; and
(4) the Committee on Banking, Housing, and Urban Affairs of
the Senate.
(d) Report Form.--The report required under subsection (b)
shall be submitted in unclassified form with a classified
annex, if necessary.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
Jersey (Mr. Malinowski) and the gentleman from New Jersey (Mr. Smith)
each will control 20 minutes.
The Chair recognizes the gentleman from New Jersey (Mr. Malinowski).
General Leave
Mr. MALINOWSKI. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
and include extraneous material on H.R. 7338, as amended.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New Jersey?
There was no objection.
Mr. MALINOWSKI. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise today in support of H.R. 7338, the Russia
Cryptocurrency Transparency Act introduced by the chairman and ranking
member of the House Foreign Affairs Committee, Representatives Meeks
and McCaul. I also acknowledge Chairwoman Waters of the Financial
Services Committee, who has been deeply engaged on cryptocurrency
issues for years and has shown such tremendous leadership on the topic.
Russia's illegal, immoral, and indefensible invasion of Ukraine has
placed renewed focus on how the Putin regime evades sanctions and
continues to fund itself.
One answer is cryptocurrency. Virtually unregulated globally,
cryptocurrency technology has increasingly become a tool for people
seeking to avoid financial sanctions. While there are legitimate and
responsible companies that police their platforms and products, there
are also products like cryptocurrency tumblers that have little or no
value to society other than helping people evade sanctions and launder
money.
At the same time, the people of Ukraine have demonstrated the
potential value of cryptocurrency. Some refugees, for example, have
found that it is a particularly useful way to conduct cross-border
transactions, and the sale of nonfungible tokens has been used to
support Ukraine and its people.
Balancing these tradeoffs is not easy, but Chairman Meeks' bill, I
believe, strikes the right balance. It will provide necessary
transparency and information about these practices to ensure that our
foreign policy is up to the challenge of adapting to this new
technology.
I strongly support the measure, and I urge all of my colleagues to do
the same.
[[Page H7906]]
Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of New Jersey. Mr. Speaker, I rise in support of the Russia
Cryptocurrency Transparency Act, H.R. 7338, and I yield myself such
time as I may consume.
Mr. Speaker, this bipartisan legislation authored by Chairman Meeks
and Ranking Member McCaul would exercise oversight of the State
Department's use of cryptocurrency as part of its rewards program, as
well as measures to improve the efficacy and enforcement of U.S.
sanctions against Russia.
Emerging technologies like blockchain, the foundation for many
cryptocurrencies, offer immense opportunities. For example, people
around the world sent aid using cryptocurrency to those fleeing
Russia's full-scale barbaric invasion of Ukraine.
However, this bill will ensure that the U.S. is taking the necessary
steps to prevent these emerging technologies from undermining
sanctions, including those currently aimed at bankrupting Putin's war
machine.
While the rise of digital assets like cryptocurrencies promise
innovative financial opportunity, digital assets could be ripe for
abuse as Russia seeks to evade the unprecedented sanctions the United
States and Europe have imposed for Vladimir Putin's brutal war of
choice on Ukraine.
{time} 1530
This legislation will provide greater oversight in the State
Department's rewards program, helping ensure that these hard-to-trace
funds are not falling into the hands of bad actors. It also will help
the State Department develop sanctions enforcement mechanisms to
prevent sanctions evasion through the use of cryptocurrencies.
Given the tremendous need for humanitarian support as Europe faces
the largest influx of refugees since World War II, this legislation
also asks the State Department to assess how crypto can be used to
support humanitarian assistance to Ukrainians fleeing the war.
Mr. Speaker, I urge support for the bill, and I yield back the
balance of my time.
Mr. MALINOWSKI. In closing, Mr. Speaker, I just want to thank, again,
my colleagues, Chairman Meeks and Ranking Member McCaul, for
introducing this legislation.
Mr. Speaker, I hope my colleagues will join me in supporting it, and
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New Jersey (Mr. Malinowski) that the House suspend the
rules and pass the bill, H.R. 7338, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. ROSENDALE. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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