Global Regulators Worry Cryptocurrency Being Used To Evade Sanctions on Russia

by Victoria Santiago
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Officials are worried that Russia might be using cryptocurrency to evade sanctions. All crypto assets are being closely watched because of this. The global Financial Stability Board (FSB) is keeping track of all of these Russian-owned assets during the war in Ukraine. On top of that, lawmakers in the US and Europe are saying that digital asset companies aren’t set up with sanctions in mind, per CNBC.

What We Know

  • The global Financial Stability Board is closely watching Russian crypto assets.
  • There have been worries that Russia could use crypto to evade sanctions.
  • Digital asset companies have denied bans on all Russian users.
  • Ukraine has been using crypto to raise money during the war.

Companies Aren’t Up To the Task of Banning Russia Cryptocurrency Users

The crypto sector has been on the defense since Russia invaded Ukraine at the end of February. Lawmakers in the US and Europe have been worried that Russia may try to find ways around Western sanctions by using crypto. Officials think that these digital asset companies aren’t up to the task of working with sanctions.

In fact, some major crypto exchanges have even denied requests to cut off all Russian users. That has only added to concerns that crypto could be used to avoid sanctions. Russia has also been barred from using foreign reserves. Since they can’t get to their assets in other countries right now, crypto could be an alternative.

Binance, Coinbase, and Kraken won’t block Russian users. They say that doing so would go against their core beliefs. They say that blocking all Russia-based users could hurt innocent people in the country.

However, many of them have agreed to block the addresses of those on the sanctions list. The sanctions list has a number of people on it that have been identified by the Treasury’s Office of Foreign Assets Control. There is one digital startup that has blocked all Russian users, though. DMarket is a Ukrainian NFT startup that has blocked all new users from Russia and Belarus.

That being said, most are aware that bigger requests could come. These companies have warned users that they may have to comply with these requests in the future.

Amid these concerns, Ukraine has also raised millions of dollars in crypto. They have posted asked for digital asset donations online.

The FSB Is Monitoring This Crypto Situation

The FSB has been keeping an eye on any new developments in the digital asset world.

This board brings together regulators, central banks, and officials from 20 economies. They share information among themselves. CNBC reports that some members of the FSB are working to make better laws around crypto. For example, the UK wants to bring crypto under anti-money laundering and terrorist financing curbs. This will help enforce laws around digital assets.

Outsider.com