Crypto on the defensive amid warnings it isn't doing enough to comply with Russia sanctions

euronews.com:

Cryptocurrency evangelists are on the defensive amid warnings from US and European lawmakers that digital asset companies are not up to the task of complying with Western sanctions imposed on Russia following the country’s invasion of Ukraine.

The criticism has seen the crypto industry scrambling to regain control of the narrative, with many executives frustrated that the compliance regimes in place at leading exchanges, such as Coinbase and Binance, are being called into question.

At the same time, the increased scrutiny could be a pivotal moment for the sector to prove that it is not the "Wild West" of finance that regulators have painted it to be.

"It's an opportunity for the industry to show that it is mature and that it knows how to properly manage risk," said Matt Homer, an executive in residence at venture capital firm Nyca Partners.

The crypto community was largely caught flat-footed as the United States and its allies moved to impose sweeping sanctions against Russia's banks, elites, and other state firms.

Unlike other payment companies, crypto exchanges have rejected calls to cut off all Russian users, saying that goes against the industry's libertarian values, sparking concerns among European officials and US lawmakers that digital assets could be used to circumvent the sanctions.

US Senator Elizabeth Warren has alleged that many crypto exchanges and wallets have lax compliance controls and are not collecting data on customers' identities.

But executives at exchanges including Kraken, FTX, Coinbase, and Gemini, as well as industry trade groups, say that's not the case.

"This rhetoric is inaccurate," said Elena Hughes, chief compliance officer at Gemini, adding that the company screens clients like any other financial