A Treasury official told senators on Tuesday that Russian President Vladimir Putin may use cryptocurrencies to dodge sanctions imposed by the United States and other nations as a result of the Kremlin’s unjustified invasion of Ukraine.

When Sen. Elizabeth Warren, D-Mass., inquired about the possibility of using digital assets to avoid sanctions, Elizabeth Rosenberg, Treasury’s assistant secretary for Terrorist Financing and Financial Crimes, replied “Yes, senator, that’s feasible.”

To examine the next actions for deterrents against Russia’s continuous aggression against Ukraine, the Senate Committee on Banking, Housing, and Urban Affairs called the hearing. These steps included the confiscation of assets from Russian oligarchs and the G-7 request to cap the price of Russian oil.

Warren stated that ever since Russia invaded Ukraine in February, she has been worried about the possibility of privileged Russians using cryptocurrency to evade sanctions.

“At the time, we were already aware of the use of cryptocurrencies by nations like North Korea to evade sanctions and launder at least hundreds of millions of dollars. And Russia might very well be involved in it,” Warren said.

Russia has already been identified by the Treasury Department as using cryptocurrency to evade sanctions. This month, 22 people and 2 organizations—among them a paramilitary neo-Nazi organization—were singled out for aiding Russia in using the internet to finance its conflict with Ukraine.

The agency, along with oligarch Konstantin Malofeyev, privately held commercial bank Public Joint Stock Company Transkapitalbank, and 40 other people and businesses commanded by Malofeyev, first targeted a virtual currency mining company in April.

In order to close off potential pathways for sanctions evasion, Garantex, a virtual currency exchange, and the Russian-based Darknet Market Hydra were also sanctioned that month.

All of their assets located in the US or held by an American citizen were blocked by the US authorities. Treasury also prohibited transactions between sanctioned parties and anyone inside the United States.

However, Russia had already created its own digital currency in February in the hopes of engaging in direct trade with nations that would take the funds without first having to convert them to dollars. Due to the fact that cryptocurrency exchanges can be monitored on the underlying blockchain, the nation also created mechanisms to disguise the origins of transactions.

Rosenberg reaffirmed that techniques used to conceal digital transactions and technology that increase anonymity can obstruct the implementation of sanctions. In May, Treasury imposed the first-ever sanctions on these “mixers,” and in August, it imposed sanctions on another, “Tornado Cash.”

Warren stated that last month, users of Tornado Cash filed a lawsuit against the Treasury Department on behalf of Coinbase, a major cryptocurrency exchange platform in the United States.

Rosenberg referred to the fines as effective, but Coinbase’s chief legal officer, Paul Grewal, told CNBC that they established “a hazardous precedent.”

We may effectively communicate that we do not allow money laundering by using them as a deterrent to criminals who might attempt to use a mixer to launder their money, the proceeds of corruption, or the profits of any criminal conduct, according to Rosenberg.