Despite the fact that Ukraine has raised more than $50 million in its war against Russia through over 89,000 cryptoasset donations, according to data from blockchain analysis provider Elliptic, there are concerns about Russia’s possible use of cryptos to evade economic sanctions imposed by the West. However, crypto experts claim that evading sanctions through cryptos would be difficult for Russia, which has a $1.4 trillion banking sector.
In response to similar concerns about crypto being used by Russia to avoid sanctions, Ripple’s CEO and Co-founder Brad Garlinghouse stated that there are factual reasons why this will not happen on a large scale. Garlinghouse tweeted on Wednesday that in order to convert crypto to fiat, exchanges, etc., rely on banking partners who could lose their licences if any of them is found on the US Office of Foreign Assets Control (OFAC) list. “Extremely stringent KYC/AML policies are in place to avoid exactly this,” Garlinghouse explained.
In a joint statement issued on Saturday, the European Union, Canada, France, Germany, Italy, the United Kingdom, and the United States pledged to “ensure that selected Russian banks are removed from the SWIFT messaging system.” This will ensure that these banks are cut off from the international financial system, jeopardising their ability to operate globally.” SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, is a cooperative of over 11,000 banks and institutions from over 200 countries that facilitates cross-border money transfers.
“It is not possible for Russia to use cryptocurrency on a large scale to evade sanctions.” Cash is the only option, and the premiums would become prohibitively expensive after a while. It’s not a bank issue; if they see funds coming from Russia, they will block them in order to comply with the sanctions. That’s why cash is the only viable option, but it’s too time-consuming and expensive on a large scale,” Reggie Raghav Jerath, Founder & CEO of blockchain-based digital monetization platform Gather.
