In secret, the cryptocurrency industry is lobbying U.S. legislators against any legislation that would prevent Russian oligarchs using digital currency to avoid sanctions placed on Russian President Vladimir Putin’s allies after Russia attacked Ukraine.

Blockchain Association is a lobbying group representing more than 70 crypto platforms such as Ripple, Crypto.com, and Dragonfly Capital. It’s trying to convince Congress that cryptocurrency aren’t being used to bypass sanctions. The Blockchain Association is working together with Forbes Tate Partners to oppose legislation that would place sanctions on Russians already punished for using crypto to escape sanctions. Additionally, the bill will give the Treasury Secretary the power to prohibit crypto trading platforms that are based in America from conducting business with Russians.

Two bills have been introduced in U.S. House and Senate that gives the Biden Administration the authority to prohibit U.S. crypto exchanges from processing payments from Russia. This would allow the U.S. to sanction foreign exchanges processing transactions from sanctioned Russian companies or people.

This legislation could pose a threat to the sector, critics claim. Digital currencies have become so popular because they can’t be traced and used for clandestine transactions. Digital currencies would be subject to many of the same regulations as federally insured banks, which require them to keep track of their customers, fight money laundering, and report suspicious transactions back to regulators.

Curtis Kincaid (the group’s spokesperson) stated in an email that the group is helping Congress to “separate fact and fiction” about Russia’s inability to send large amounts of money through crypto transactions to avoid sanctions. Forbes Tate Partners declined to comment. CNBC was referred to the Blockchain Association by Curtis Kincaid, who is a representative of the group.

While the Biden Administration examines how and whether to regulate digital assets in a more rigorous manner, crypto has increased its lobbying. Vice President Joe Biden signedIn March, an executive order called on regulators and the government to look into cryptocurrency’s risks and potential benefits.

In-house lobbyists were a major expense for the Blockchain Association, which spent $460,000 in its first quarter. This is a record since its inception. 2018, lobbying disclosure records show. Last year, the lobbying firm for crypto said it received donations of more than $4,000,000 from three major crypto companies: Digital Currency Group Kraken, Filecoin Foundation and Kraken.

According to their first-quarter report, the group lobbying for the Russian Digital Asset Sanctions Compliance Act. Russians and companies affiliated to them who use cryptocurrency to bypass their existing sanctions will be subject to the House bill. According to crypto industry experts, digital currencies cannot be used. evade sanctions.

However, lawmakers argue that digital currencies need to be treated the same way as banks because the industry presents itself as an alternative bank system. A number of Russian-based financial institutions have been sanctioned by the U.S., which includes Russia’s. central bank. Recent action by the Treasury Department against bitcoin minersRussia.

“The cryptocurrency industry claims itself to be an alternative financial system or alternative bank. In a recent interview, Rep. John Garamendi (D-Calif.), said that banks have been sanctioned all over the country and that Russian banks are withdrawing from Russia. If they consider themselves to be a financial institution, they will find themselves in the exact same position as Bank of America and Russian banks.

According to its first-quarter lobbying disclosure reports, the group is lobbying for the Senate’s accompanying bill. A summary of the bill shows that the Digital Asset Sanctions Compliance Enhancement Act (of 2022), which bears almost the same name as the House version, was also intended to “impose sanctions with regard to the use cryptocurrency to facilitate transactions made by Russian persons under sanctions.”

Warren, a member the strong Senate Finance and Banking committees recently said to National Public Radio the bill was supposed to provide the Treasury Department with the tools it needs to strengthen its supervision of cryptocurrency platforms.

Russian oligarchs are allowed to continue using crypto for their funds. We’re going to grant Treasury authorization to treat crypto platforms the same way as banks. Warren explained that it is important to understand your customer in order to deal with those who violate sanctions.

Warren charged the crypto-industry with undermining U.S. security and violating sanctions against Russia.

Warren stated in an email statement that “It is not surprising that the unregulated cryptocurrency industry has deep pockets, an army of lobbyists and are fighting against basic rules for keeping consumers safe. But it’s still shocking that they would also seek to undermine U.S. security and our sanctions regime towards Russia.”

As an advocate group for mortgage financing, The Mortgage Bankers Association lobbied similarly against the Klepto Act. This bipartisan bill was supported by Warren and Sens. Whitehouse (D-RI.), Bill Cassidy (R-La.). According to the first quarter report, Roger Wicker (R-Miss), was also included. The Mortgage Bankers Association representative did not respond to a request for comment.

According to press releases, the legislation was created to reveal the real estate holdings of oligarchs and kleptocrats as well as international criminals that are hidden in the United States. It also strengthens U.S. Anti-Money Laundering safeguards and arms law enforcement with information necessary to trace luxury assets owned by kleptocrats in the U.S. Financial System.