Coinbase CLO Rips U.S. GAO Report on Crypto Sanctions Evasion
Coinbase chief legal officer, Paul Grewal, unleashed sharp criticism on X over a recent U.S. Government Accountability Office (GAO) report highlighting cryptocurrency usage in sanctions evasion.
Grewal slammed the GAO analysis as “shoddy” and failed to properly contextualize the crypto industry’s extensive compliance efforts. He also stated that the report performed zero comparative analysis.
Key points in Grewal’s Twitter thread:
- GAO performed “zero analysis” to measure how widely used crypto is for sanctions evasion.
- The report itself admits crypto transactions are transparent on public blockchains, enabling tracking.
- Grewal said the crypto industry spends heavily on blocking illicit transactions, unacknowledged by the GAO.
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The GAO report landed amidst ongoing pressures on cryptocurrencies from U.S. policymakers and regulators. The report alleges that digital assets enable foreign states under American sanctions to bypass such penalties.
Coinbase CLO Said The Report is an Embarrassment To Taxpayers
Notable excerpts emphasized that cryptocurrencies pose “risks” due to fast cross-border transfers and decentralized operations outside government control. In response, Senator Warren tweeted that cryptocurrencies are making it easier for rogue nations to dodge sanctions and undermine US national security.
However, in the report, the authors concede traceability on public blockchains along with transparency from crypto firms adhering to anti-money laundering rules.
Grewal points out that the GAO did not pay enough attention to important factors, instead choosing a one-sided story. He believes the GAO did not accurately evaluate the extent of illegal cryptocurrency transactions or how well the systems in place identify suspicious activities.
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The statement in the X thread also criticizes the GAO’s report for its significant analytical weaknesses. It notes that the GAO did not consider the large amounts of money that cryptocurrency companies spend on following sanctions and preventing money laundering, which is a major oversight.
Grewal ultimately deemed the lapses unworthy of taxpayer funds for producing a largely one-sided report. He said the lack of rigor “burns” public money and credibility alike.
