H.R. 7067 — Introduced in House

I 117th CONGRESS 2d Session H. R. 7067 IN THE HOUSE OF REPRESENTATIVES March 11, 2022Mr. Sherman introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To impose sanctions with respect to the use of cryptocurrency to facilitate transactions by Russian persons subject to sanctions, and for other purposes. 1. Short title This Act may be cited as the Closing Loopholes in Russia Sanctions Act of 2022. 2. Applicability This Act applies to any person engaged in the business of effecting transactions in digital assets for the account of others, including any communication protocol systems or other similar systems using decentralized finance technology or other similar technology to provide transactional services, including digital wallets, digital asset trading platforms, digital asset exchanges, and digital asset mining services. 3. Definitions In this Act: (1) Digital assets The term digital assets includes— (A) any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology, as specified by the Secretary of the Treasury; and (B) nonfungible tokens and other digital assets using blockchain or other similar technology. (2) Digital asset exchange The term digital asset exchange or virtual currency exchange includes— (A) an entity such as a State-licensed money services business or money transmitting business, as defined in section 5330 of title 31, United States Code; and (B) a financial institution that exchanges virtual currency or digital assets. (3) Digital asset wallets The term digital asset wallets mean interfaces for storing and transferring digital assets. (4) Foreign person The term foreign person means an individual or entity that is not a United States person. (5) Hosted wallets The term hosted wallet means a digital account hosted by a third-party financial institution that allows the account holder to store, send, and receive cryptocurrency and digital assets. (6) Unhosted wallets The term unhosted wallets means a digital wallet that is not hosted by a third-party financial system, including software hosted on a computer, phone, or other device of a person. (7) United states person The term United States person means— (A) an individual who is a United States citizen or an alien lawfully admitted for permanent residence to the United States; or (B) an entity organized under the laws of the United States or any jurisdiction within the United States, including a foreign branch of such an entity. 4. Imposition of sanctions with respect to the use of cryptocurrency to facilitate transactions by Russian persons subject to sanctions (a) In general As soon as practicable after the date of the enactment of this Act, the President may exercise all of the powers granted to the President under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary to block and prohibit all transactions in property and interests in property of a foreign person described in subsection (b) if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person. (b) Foreign persons described A foreign person described in this subsection is a foreign person— (1) that operates a digital asset exchange or is otherwise a part of the digital asset industry; and (2) that facilitates, directly or indirectly, transactions for any person with respect to which sanctions have been imposed by the United States for actions relating to the Russian Federation, including transactions that facilitate the evasion of such sanctions. (c) Implementation; penalties (1) Implementation The President may exercise all authorities provided under sections 203 and 205 of the International Emergency Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out this section. (2) Penalties A person that violates, attempts to violate, conspires to violate, or causes a violation of this section or any regulation, license, or order issued to carry out this section shall be subject to the penalties set forth in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) to the same extent as a person that commits an unlawful act described in subsection (a) of that section. (d) Exception relating to importation of goods (1) In general The requirement to block and prohibit all transactions in all property and interests in property under subsection (a) shall not include the authority or a requirement to impose sanctions on the importation of goods. (2) Good In this subsection, the term good means any article, natural or manmade substance, material, supply or manufactured product, including inspection and test equipment, and excluding technical data. 5. Virtual currency exchanges No digital asset exchange that does business in the United States shall transact with, or fulfill transactions of, hosted wallets and unhosted wallets or cryptocurrency addresses that are known to be, or could reasonably be known to be, affiliated with persons headquartered in the Russian Federation. 6. Transactions reports (a) In general Not later than 60 days after the date of enactment of this Act, the Financial Crimes Enforcement Network shall require United States taxpayers holding greater than $10,000 in cryptocurrency in accounts outside of the United States to file a report described in section 1010.350 of title 31, Code of Federal Regulations, using the form described in that section, in accordance with section 5314 of title 31, United States Code. (b) Rulemaking Not later than 60 days after the date of enactment of this Act, the Secretary of the Treasury shall finalize rulemaking requiring banks and money service businesses to submit reports, keep records, and verify the identity of customers in relation to transactions involving convertible virtual currency or digital assets held in unhosted wallets. 7. Report Not later than 60 days after the date of enactment of this Act, the Secretary of the Treasury shall submit to Congress a report on the progress of the Department of the Treasury in carrying out this Act, including any resources needed by the Department to improve implementation and progress in coordinating with governments of countries that are allies or partners of the United States. 8. Sunset Sections 4 and 5 shall cease to have effect on the date on which the President certifies to Congress that all sanctions imposed by the United States with respect to the Russian Federation have terminated.