For the past month or so, many regulators and members of the U.S. government have expressed concern that Vladimir Putin and Russia may be trying to use crypto to avoid recent sanctions. However, at the time of writing, there is no evidence to suggest this is happening.
Russia May Not Have Strong Access to Crypto
This sentiment comes from Jonathan Levin – co-founder and chief strategy officer at Chainalysis, a blockchain analysis firm – and a panel of alleged experts, who recently stated in a discussion with the Senate Banking Committee that Russia is not likely to have the crypto access so many American politicians believe it has.
We have not seen any evidence of Russia or [President Vladimir] Putin systematically using cryptocurrencies to evade sanctions at the moment.
Right now, Levin and other analysts believe that there is not enough liquidity in the crypto market for Russia to engage in such activity. In addition, if the nation were to try such a tactic, regulators in the U.S. would know right away. Michael Mosier – former acting director of the Financial Crimes Enforcement Network (FinCEN) – agrees with this sentiment, mentioning:
You can’t flip a switch overnight and run a G20 economy on cryptocurrency. Someone needs to want rubles and there are not a lot of people in the world right now that want rubles. Second, you need to find somebody that’s willing to make that trade that also feels comfortable that they’re not violating any sort of global laws… But most likely it’s not going to be anyone outside of Russia, that’s for sure.
Despite this news, several lawmakers in the United States – particularly democrats – are skeptical. Many have come back to claim that while Russia may not be using crypto to avoid sanctions on a grand scale, it’s certainly possible that certain individuals that have been sanctioned are doing so.
Elizabeth Warren – a democrat senator from Massachusetts – says that she and her constituents have already noticed such activity in regions like Venezuela, Iran, and North Korea, and that Russia could be considering a similar move as a means of promoting its assets to the world.
Warren Has Fought Long and Hard
Not long ago, Warren initiated a new bill that if passed, would require crypto exchanges to closely monitor sanctions laws and block all sanctioned individuals and countries from engaging in their services. In response to this bill, trading platforms like Coinbase and Kraken stated that while they are willing to take sanctions seriously, they will not cut off ordinary people from regions like Russia given that they deserve an opportunity to keep their wealth safe and sturdy just like everyone else.
Right now, it is believed that everyday Russians are using crypto to stabilize their wealth following the drastic fall of the ruble, the nation’s fiat currency.