It should be noted that the topic of Russia and cryptocurrencies to possibly circumvent new sanctions has not been raised for the first time. In particular, the day before, Ripple CEO Brad Garlinghouse made it clear that digital assets are not suitable for evading sanctions.

Firstly, the centralised cryptocurrency industry is closely linked to banks, which closely monitor and comply with sanctions lists. This means the coins can only be used for transfers, but it will not be possible to buy them initially through banks. Secondly, the coins are not mentioned among the sanctions provisions, even though they could be there. So the authorities have done this deliberately. Read more about the situation in a separate article.


What will happen to Russian cryptocurrency users?

Here is one of Clinton’s quotes in which she shares her attitude to what is happening. The line was published by the news outlet Decrypt.

I was disappointed that some of the so-called crypto exchanges – not all of them, but some of them – are refusing to stop operations with Russia.

Hillary Clinton

She also added that “everyone should do as much as they can to isolate the Russian economy right now.” Recall that several crypto-exchanges, including Coinbase, Binance and Kraken, have refused to completely restrict the accounts of all Russian users and said there was no legal basis for this. However, many of them made it clear that they would comply with the sanctions if they applied to individual citizens.

In particular, the head of cryptocurrency platform Binance, Changpen Zhao, commented on the situation on his Twitter. He made it clear that he does not agree with the media's position. At issue are allegations that crypto exchanges are allegedly failing to comply with sanction requirements due to the lack of a ban for Russian residents. According to him, at least Binance takes sanctions into account - as do global banks.

In contrast to the aforementioned platforms, Ukrainian cryptocurrency exchange Whitebit had earlier asked to restrict Russian users and said it had already put in place procedures to check sanctions lists. Here is a quote from the platform’s official newsletter.

Procedures have been put in place to check users against sanctions lists, trading activity with the Russian ruble has been closed, and registration has been suspended for users from the Russian Federation and the Republic of Belarus.

The dollar exchange rate in the Russian Federation has significantly depreciated amid the sanctions

Tom Keating, founder of the UK Centre for Financial Crime and Security Studies, also commented on the blockades.

I think there is a reputation issue here. Do you want your company to be known as an exchange that facilitated sanctions evasion, even if it wasn’t technically illegal? I wonder if the exchanges will go down the same path as Eurovision or FIFA? I think they can make their choice, but when they lose access to western banks for having facilitated sanctions evasion, they will quickly change their minds.

During the interview, Clinton also took the opportunity to urge Western market players to do more to curb Russia’s use of cryptocurrencies to circumvent sanctions.

I think the Treasury Department and the Europeans should take a hard look at how they can prevent the cryptocurrency market from giving Russia the opportunity to avoid sanctions. Both in general and against specific individuals.

Bitcoin

This is not the first time Clinton has drawn attention to such problems in the crypto industry. Recall that last November, the politician said that cryptocurrencies could undermine the status of the US dollar. In the same month, Clinton called on US President Joe Biden’s administration to regulate cryptocurrencies at a time when states and organizations are manipulating crypto.


We believe that a ban on interaction with users from Russia by cryptocurrency exchanges is only possible at the level of each individual exchange's management for now. Large platforms will certainly continue to serve citizens, and this will continue until a ban is issued by the authorities. Whether the latter will be published is still difficult to say.


What do you think about it? Share your opinion in our millionaires’ cryptochat. We’ll talk about other topics related to the blockchain and decentralisation industry there as well.

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