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The Coinbase Chief Legal Officer (CLO), Paul Grewal, has vehemently countered a recent report by the U.S. Government Accountability Office (GAO). The report raised concerns about the use of cryptocurrencies to evade U.S. economic sanctions. The GAO report highlighted instances where foreign states facing U.S. sanctions used cryptocurrencies like Bitcoin (BTC) to circumvent the intended impact of economic restrictions.
Coinbase CLO bashes U.S. GAO’s stance
In a series of tweets, Grewal criticized the GAO’s findings and highlighted a lack of thorough analysis. He questioned the absence of comparative studies and general analysis. Additionally, he accused the GAO of targeting an industry that diligently invests millions to comply with legal frameworks.
Grewal urged readers to scrutinize the report’s content. Furthermore, the Coinbase CLO asserted that buried within the clickbait links were admissions that digital assets are not an efficient means to evade sanctions. This highlights that the U.S. GAO itself isn’t sure about its stance, which reassures that the crypto industry shouldn’t be blamed alone.
In addition, he expressed concerns over taxpayers’ money used for the research by GAO. He said that it would be “embarrassing” for the taxpayers to see their funds being used for such “shoddy work” by the government. Moreover, Grewal bluntly declared, “That’s the smell of the people’s money being burned.”
The aforementioned statement comes as Coinbase is engaged in a court battle with the U.S. Securities and Exchange Commission (SEC). The SEC had earlier sued the crypto exchange in June last year for functioning as an unregistered national securities exchange. However, Coinbase has strongly refuted the claims while the judge’s ruling is impending.
Also Read: Coinbase CEO Extends Respect To Jamie Dimon Despite Bitcoin Clash
What did the U.S. GAO report say?
The GAO report outlined how states facing U.S. sanctions strategically used cryptocurrencies to conceal transactions. It detailed scenarios where digital assets like Bitcoin facilitated fund generation from cybercrime and other illicit activities. It added that this led to an undermining of the intended impact of the economic sanctions.
In addition, the report noted that the Treasury had previously designated individuals in China for laundering stolen virtual currencies in support of North Korea’s weapons programs. Whilst, to address these challenges, federal agencies such as the Departments of Justice and Treasury have taken action against those exploiting digital assets to evade sanctions.
Examples include charging Russian and Venezuelan nationals for using cryptocurrency to bypass sanctions related to obtaining Venezuelan oil and U.S. military technology. GAO’s findings also highlighted that the Treasury imposed a massive financial settlement on Binance and its affiliates. This move was taken due to Binance’s violation of U.S. anti-money laundering and sanctions laws.
However, the report also shed light on the limitations of crypto being used for the evasion of sanctions. This part was already highlighted by the Coinbase CLO and indicates a rather diplomatic stance while the agency initially blamed it all on the crypto industry. GAO noted that federal agencies and private sector entities can trace transactions on public blockchains to counter illicit activities.
Also Read: Coinbase CLO Calls for Congressional Oversight Over SEC
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