With the recent invasion of Ukraine by Russia, many have stated that the imposing nation is going to look to bitcoin and assorted cryptocurrencies to avoid or get around sanctions enforced by the United States and its allies. In response to this, the U.S. is now creating a special task force to prevent that from happening.
Can Russia Use Crypto?
Roughly two weeks ago, the world watched in shock and horror as Russia invaded its neighbor Ukraine. Thus far, several civilian areas have been targeted, resulting in fallen cities and several deaths. The U.S. and many other countries have sought to impose sanctions on Vladimir Putin, the leader of Russia, and the country’s cooperating regulators, though it is believed that crypto may give Russia an opportunity to thumb its nose at those who are going against it.
Attorney general Merrick Garland of the U.S. Department of Justice (DOJ) is now working to establish what’s known as “Task Force Klepto Capture.” The team is described as a group of individuals with the knowledge and expertise necessary to enforce sanctions in full. This means removing any barricades to those sanctions – which could include crypto use – for Russia.
Garland says that Russia is likely to try and use crypto as a means of laundering funds garnered through “foreign corruption.” He also says that digital assets could be used to push the country’s military aggression. In an interview, Garland commented:
The task force will be fully empowered to use the most cutting-edge investigative techniques including data analytics, cryptocurrency tracing, foreign intelligence sources, and information from financial regulators and private sector partners to identify sanctions evasion and related criminal misconduct.
Investigating the Sources of All Monies
He also says that the task force will consider seizing any funds – particularly crypto funds – that Russia is housing given that they may likely stem from “unlawful conduct.” He is proposing that the group investigate all sources of Russian money – both fiat and digital – and determine whether these funds go against anti-money laundering rules. He stated:
The Justice Department will use all of its authorities to seize the assets of individuals and entities who violate these sanctions. We will leave no stone unturned in our efforts to investigate, arrest, and prosecute those whose criminal acts enable the Russian government to continue this unjust war. Let me be clear: if you violate our laws, we will hold you accountable.
Crypto is becoming a serious topic in eastern Europe following the start of this conflict. Not only is Russia potentially looking to utilize crypto to avoid sanctions, but Ukraine has taken to social media on several accounts to request crypto donations from individuals looking to ensure the Ukrainian military has what it needs to defend the nation. Thus far, Ukraine has garnered more than $30 million in crypto.