Welcome back to the Tribe! In this post we dive into the Crypto Sanctions for Russian users.
Nothing should be considered investment or financial advice. Enjoy the ride!
Crypto Sanctions
Following the recent sanctions imposed on Russia by the West and other countries for the invasion of Ukraine. There have been fears that crypto will be used to evade the sanctions. This prompted calls from the authorities that crypto exchanges restrict the accounts of their Russian users. Despite the measures put in place by the exchanges, it seems some Russian officials and oligarchs found a way around them. But, some firms have had some success in tracking them down.
Russian Users
In response to the calls by authorities to extend the sanctions to Russian crypto users. Many exchanges refused to take blanket action on their Russian users. Because it compromises decentralization which is a core feature of crypto and also avoids punishing the innocent in the process.
Major exchanges such as Coinbase promised to freeze only accounts in the sanctions list. A course of action that they took, led to the restriction of 25,000 accounts linked to those supporting the Russian effort.
Despite these measures, some Russians still found some way around the sanctions to hedge their money in crypto assets.
Tracking Down Evaders
Cryptoforensic firms such as elliptic and chainalysis seem to be doing a great job at plugging the holes these evaders are exploiting with their blockchain analysis tools.
In a statement the crypto forensic firm Elliptic said;
“We are collaborating with government agencies and other organizations to ensure that those responsible for enabling the brutal and illegal invasion of Ukraine cannot use crypto assets to hide their wealth”
The co-founder of the firm Tom Robinson also said that they gave information on a crypto wallet that may be linked to sanctioned Russian officials and oligarchs to western officials. The wallet tracked down by Elliptic contained significant crypto-asset holdings, Robinson claimed.
Elliptic CEO Simone Maini also wrote in a blog post that they had identified over 400 virtual asset service providers (VASPs), mostly exchanges, where crypto can be purchased with Rubles. These VASPs according to Maini are unregulated and allow users to access their services anonymously.
She also added that;
“We (Elliptic) have identified several hundred thousand crypto addresses linked to Russian-based sanctioned actors that go beyond those included in the sanctions lists and include other addresses that we have been able to associate with these actors through our analysis”
Tracking sanction evaders going forward
Earlier this month, another crypto forensics firm Chainalysis promised to provide a range of analytic tools for free to crypto platforms willing to comply with the sanctions requirement.
Furthermore, the belief that crypto cannot be traced seems to hold no water with Elliptic.
According to Robinson;
“It’s not proving out realistic that oligarchs can completely bypass sanctions by moving all their wealth into crypto. Crypto is highly traceable. Crypto can and will be used for sanctions evasion, but it is not the silver bullet.”
A crackdown on oligarchs and officials trying to hedge their wealth in crypto while supporting the Russian war efforts is a marathon and not a sprint. It definitely will be difficult but not impossible going forward.
Other News – Institutional Investment Exchange
Singapore-based digital asset startup Crypto.com has announced the rollout of its exchange platform for institutional investors in America. The launch will reportedly continue over the course of the next few months and investors can join the waitlist to receive access to the service.
With growing competition in the cryptocurrency industry, the launch could be a strategic move to position Crypto.com as a leading choice for digital asset traders.
Read more here…
Crypto Sanctions News
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