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Russia Declares War and Cryptocurrency is Under Fire

Updated: Mar 27, 2022

Russia declared war on Ukraine in late February 2022. In response, the United States issued a range of sanctions or penalties against Russia, to cripple Russia’s trade, export, and other economic activities.

However at least 1 crypto analytics firm, Elliptic says that Russian oligarchs are using cryptocurrency to bypass these sanctions. This analytics firm shared that there is a crypto wallet, which has ‘significant asset holdings’ which can be traced to Russian owners. This discovery has caused Congressional and world leaders to target cryptocurrency once again, with a new angle – concerns that cryptocurrency is being used for “sanctions busting”.

Thankfully, cryptocurrency exchanges have been quick to respond. FTX Founder, Sam Bankman Fried, “slams the crypto industry message on Russian sanctions”. It should be noted that FTX cut off support to sanctioned users and cut off access to all Russian banks. Yet other exchanges like Binance and Kraken have said cutting off all Russians goes against the industry's libertarian values.

In response to the concerns about the roles of exchanges with sanctions, Democratic U.S. Senators introduced the “Sanctions Compliance Bill” that would enable the government to sanction foreign cryptocurrency firms doing business with sanctioned Russian entities and prevent them from transacting with U.S. customers. This wide-reaching bill will be one to watch as it will shape the national conversation on cryptocurrency policy as it is being developed.

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