- Several governments are taking steps to prevent Russia from utilizing crypto.
- According to a study, the use of crypto weakens the effectiveness of U.S. sanctions.
Neither Binance nor Coinbase, two of the largest cryptocurrency exchanges, think that crypto can be used to assist Russia to avoid Western sanctions. There have been fears from governments globally since Russia launched its invasion of Ukraine that cryptocurrency may be used to avoid sanctions imposed by the West. Whether or not crypto may be an effective instrument to bypass sanctions has been the subject of discussion between the CEOs of two large cryptocurrency exchanges.
Changpeng Zhao (CZ) said:
“Currently, the media and politicians are spending a lot of effort and focus on crypto and sanctions. The truth is, crypto is too small for Russia.”
Everyone Can Review Crypto Transactions
For privacy-focused cryptos like monero, Zhao said that utilizing them wouldn’t work since their market value is under $3 billion, but Russia’s GDP is $1.5 trillion. The CEO of Binance emphasized that crypto assets are “not an effective tool for illicit activities,” citing that everyone can review every crypto transaction. The CEO of Coinbase, Brian Armstrong, feels the same way.
On Friday, Brian tweeted:
“We don’t think there’s a high risk of Russian oligarchs using crypto to avoid sanctions. Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets.”
Several governments across the globe are taking steps to prevent Russia from utilizing cryptocurrencies to circumvent sanctions, including the G7 nations, the European Union, and others. According to a study produced by the U.S. Treasury Department last year, the use of crypto weakens the effectiveness of U.S. sanctions. The department is closely monitoring Cryptocurrency-based sanctions evasion.