The European Union, the US, and other nations have imposed heavy sanctions on Russia for invading Ukraine and there is a growing concern that individuals and organizations from Russia could resort to crypto to try and circumvent the sanctions.
Some days past, a deal was reached to exclude some Russian banks from the international financial transaction system SWIFT and the US is also contemplating imposing sanctions on the Russian central bank.
The imposed sanctions shall make Russians have limited access to foreign cash and it shall as a result stifle the economic progress in Russia and further isolate the country.
But there is a new threat in town and that is crypto transactions. By being decentralized (free from any central command including central banks) crypto offers and the involved countries are not sleeping to ensure that companies and individuals in Russia do not resort to crypto transactions.
US sanctions apply even to digital assets
According to the US Treasury Department, the sanctions imposed by the US on Russia include checks on digital currencies and they took effect from March 1. The white house also advised large crypto exchanges to avoid doing businesses with any of the sanctions firms.
While some exchanges like Binance have taken heed to the US White House, there are some like Kraken that believe restricting Russian users goes against cryptocurrencies' freedom values. Binance was the first crypto exchange to take action against Russian accounts promising to freeze Russian and Belarusian user accounts.
In an executive order released a few days ago, the US government said that it shall take action against those who shall circumvent the sanctions on Russia including through using cryptocurrencies.
The executive order stated:
“All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in … deceptive or structured transactions or dealings to circumvent any United States sanctions, including through the use of digital currencies or assets or the use of physical assets.”