Note that cryptocurrencies are often presented as a means to circumvent established boundaries. The reason for this is that digital assets are decentralised, meaning there is no way to withdraw them from a particular cryptocurrency wallet outside of centralised platforms like exchanges.

However, doing such a thing on a national scale is hardly feasible. After all, the coin niche in its current state is closely tied to the modern financial infrastructure. Therefore, it is hardly suitable as a tool to circumvent restrictions.

Will cryptocurrencies help with sanctions?

Since the start of the military invasion, Russia has faced unprecedented economic pressure from a huge number of countries, including European states and the US. We are talking about severe banking restrictions, stopping cooperation in many areas and even disconnecting several major banks from the international SWIFT system.

Sanctions have also been attempted in the cryptocurrency sector, but this has had little effect. For example, the largest cryptocurrency exchange, Binance, announced that it would not freeze the accounts of Russian users. Given the fact that it is almost impossible to completely ban the circulation of crypto for international transactions, digital assets have suddenly started to be considered a valid argument to circumvent sanctions.

A little clarification: A little later, Binance CEO Changpen Zhao noted on Twitter that there was a high probability of accounts being restricted in the future. However, for that to happen, they would have to be subject to worldwide sanctions, which has not yet arisen.

Changpeng Zhao’s tweet

As noted by CryptoPotato, Ripple CEO Brad Garlinghouse disagrees with such statements. He noted that cryptocurrency trading platforms work in conjunction with banking partners who risk losing their licences if they do not follow sanctions requirements. It is to prevent such incidents that cryptocurrency exchanges have adopted a number of stringent measures to verify the identity of users, which include the disclosure of passport details.

Here’s Brad’s quote.

Instead of listening to responsible market players who have clearly stated that they will abide by legal sanctions, some experts and the media continue to compare crypto and the darknet platform Silk Road. This is an extremely outdated and hackneyed argument that simply does not hold true today.

In other words, many crypto platforms have long worked very closely with foreign banks. Those will never go against sanctions, which means exchanges under threat from regulators and those same banks will have to comply with sanctions requirements. Thus, crypto can hardly be used as a tool to circumvent sanctions.

It is also important to quote Hasib Qureshi of Dragonfly here. Here is his retort from Twitter.

Stop talking about countries like Russia allegedly using cryptocurrencies to circumvent sanctions. Using crypto is not about “circumventing sanctions”. The sanctions list was very clear-cut. And if the G7 countries wanted to impose cryptocurrency sanctions, they would have done so. But they didn’t.
Taking action outside of sanctions does not mean evading them. In fact, it is “changing behaviour in order to comply with sanctions”. That’s what countries that fall under sanctions are supposed to do.
But if Russian banks were still using SWIFT in secret mode, then that could be considered sanctions evasion.

The regulation of the crypto market has also received more attention amid a worsening global environment. Here, for example, is a quote from Federal Reserve Board of Governors member Jerome Powell on the subject, cited by Coindesk

The conflict between Ukraine and Russia has highlighted the need for Congress to act on digital assets, including cryptocurrencies. We have this booming industry made up of many areas and no regulatory framework to regulate it.

Federal Reserve Board of Governors member Jerome Powell

Powell cited the possibility of cryptocurrencies being used by terrorists or other malicious actors as another example of the need for additional regulation. On Wednesday, he addressed the House Financial Services Committee on the state of the economy and monetary policy. On Thursday, he will address the Senate Banking Committee. Cryptocurrencies are expected to be discussed at length at these speeches as well.


We believe that the position of the Ripple spokesperson does reflect the current situation of cryptocurrency. The niche is now very closely aligned with the banking industry, and banks are certainly not going to try to circumvent sanctions. Accordingly, this is unlikely to happen with crypto either. In theory, awareness of this point should have a good effect on the digital asset industry - especially among those who are not yet familiar with it.

Look for even more interesting things in our millionaires’ crypto-chat. There, discuss other important developments related to the world of decentralisation and blockchain.