CHICAGO—Treasury Secretary Janet Yellen said on Wednesday that the U.S. would continue to monitor Russian efforts to evade the bevy of sanctions placed on the country since its invasion of Ukraine.
“We will continue to look at how the sanctions work and evaluate whether or not there are leakages, and we have the possibility to address them,” Ms. Yellen said at an event at the University of Illinois Chicago.
Some Senate Democrats wrote in a letter to Ms. Yellen Wednesday raising concerns that cryptocurrencies could be used to undermine the wide-ranging penalties, which have targeted Russian financial institutions, its central bank and individuals. Ms. Yellen said the Treasury was monitoring that possibility.
“I often hear cryptocurrency mentioned and that is a channel to be watched,” she said. Ms. Yellen added that many participants in cryptocurrency networks are subject to anti-money laundering and sanction rules. “It’s not that that sector is completely one where things can be evaded,” she said.
Russia’s invasion of Ukraine last week has fueled demand for bitcoin and other cryptocurrencies in both countries. The assets, which can usually be transferred by two parties without a regulated intermediary, are often seen as an alternative payments network, and Treasury warned in October that they could “potentially reduce the efficacy of American sanctions.”
Chainalysis, a firm that traces cryptocurrency transactions and has millions of dollars of contracts with U.S. law enforcement agencies, hasn’t detected evidence of major sanctions evasion by Russians in cryptocurrency markets, a spokeswoman said Wednesday.