Specifically, the US Treasury published new regulations on digital currencies and participants in the sector and warned digital currency exchanges not to facilitate the transactions of individuals or entities that appear on the sanctions list.
“All property and interests in property that are in the United States, that hereafter come into the United States, or that are or hereafter come into the possession or control of any United States person of the following persons are blocked from being transferred, paid, exported, withdrawn, or otherwise dealt with…deceptive or structured transactions or dealings to circumvent any United States sanctions, including through the use of digital currencies or assets or the use of physical assets,” the document states.
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The United States and Europe announced the exclusion of several Russian banks from the SWIFT network, referring to the Society for Worldwide Interbank Financial Telecommunications. Furthermore, the US, the EU, Switzerland and Japan moved to freeze the international reserves of the Central Bank of Russia, making it impossible for the entity to defend its currency. As a result, the ruble continues to fall and has already exceeded 30% depreciation. Bitcoin today seems to be a way out of the financial crisis in which Russia fell as a result of Western sanctions. Russia was forced to impose capital controls, foreign exchange barriers, as it did not have international reserves to support the ruble.
Cryptocurrencies are popular in Ukraine and Russia. Ukraine ranked fourth in a global adoption index created by analytics firm Chainalysis. A Russian government report estimates that there were more than 12 million cryptocurrency wallets held by Russian citizens with around 2 trillion (million) rubles, which is equivalent to about $20 billion.
Kaiko, a well-known agency dedicated to researching the adoption of cryptocurrencies, reported that the volume of bitcoins traded in the country increased to 1.5 billion Russian rubles and reached a new high since May 2021. Furthermore, Kaiko confirmed that the cryptocurrency stable USDT also gained special relevance among savers and calculates a total movement of 1.3 billion rubles in this digital currency.
This Wednesday it has also transpired that the EU will prepare measures in the cryptocurrency sector so that they do not contribute to Russia evading the financial sanctions imposed by the Member States for its military attack on Ukraine, as agreed on Wednesday by the Ministers of Economy and Finance of the G-7. This was explained by the French minister and rotating presidency of the EU, Bruno Le Maire, who reported that the Twenty-seven have agreed on the need to work on “supplementary measures” that increase the effectiveness of the sanctions that have been put in place, such as the paralysis of the Russian Central Bank or the freezing of its assets.
All of the above is evidence that Western governments are aware that largely unregulated digital currencies, some of which can be difficult to trace internationally, offer a potential way for individuals on the sanctions list. they can avoid them. Although the US Treasury regulations only apply to US entities, federal officials are asking exchanges around the world to comply. “In all likelihood, we can expect similar guidance from government departments in the UK, Europe, and other countries in the coming days,” Coingeek said.
While US entities will quickly comply with Treasury regulations, most exchanges have denied the Ukrainian government’s request to block Russian IP addresses and freeze Russian and Belarusian assets. The request came directly from the Ukrainian Deputy Prime Minister and Minister for Digital Transformation Mykhailo Fedorov. While some, like the Ukrainian-based digital asset platform DMarket, complied with the request, others like Binance, Coinbase, and Kraken refused.
Source: Ambito
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