Paul Grewal, the top lawyer at crypto exchange coinbase, expressed his disapproval to the US Government Accountability Office (GAO) report on the use of cryptocurrencies to evade sanctions.
According to Grewal, the GAO failed to properly investigate and criticize an industry that spends millions on compliance.
On January 16, the GAO published a report on the effectiveness of economic sanctions and their vulnerability to digital assets.
The report highlighted instances where the US has encountered sanctions being bypassed using cryptocurrencies.
“Digital assets like Bitcoin and other virtual currencies present risks to the implementation and enforcement of US sanctions, but various factors mitigate these risks to some extent. A key feature of digital assets is the ability of users to quickly transfer funds across borders,” the report stated.
The GAO identified several main risks associated with cryptocurrencies: – their anonymity allows users to conceal financial transactions – differences in legal systems and financial reporting requirements across jurisdictions can be exploited by crypto participants to avoid consequences of unlawful financial activities – sanctioned individuals can engage in cybercrime, such as stealing digital assets, for income generation.
However, as Grewal pointed out, the report itself acknowledges that cryptocurrencies are not an efficient way to circumvent sanctions.