[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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