Crypto sanctions on Russia over Ukraine Invasion

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Russia’s invasion of Ukraine again began on 24th February 2022. It has been reported to be a major escalation of the Russo-Ukrainian war that began in 2014, the fresh invasion that started last month can be the most extensive military action in Europe since WWII. The attack had now entered its fifteenth day and continues to be more catastrophic than ever; when the invasion first started, Rescue.org recorded that about 2 million people had fled across borders to seek safety, the number continued to double. Crypto exchange platforms like cfd trader may be called into action to help end the invasion.

In the this article, you will learn how they play a major role.

As the attack continues to claim lives and property, several World leaders have condemned the invasion. Some are taking various actions to pressure the Russian President, Vladimir Putin, to end the attack on Ukraine. Recently the President of the United States, Joe Biden, bans US imports of Russian oil and Gas; following the ban, Right advocates and Ukrainian leaders called on European allies to sanction Russia’s oil and gas sector in response to the country’s invasion of Ukraine. However, European nations that rely on Russian oil and Gas for a large share of their energy needs have hesitated because they fear a ban has the potential of cutting them off from much-needed supplies and might lead to prices skyrocketing.

Coinbase announces banning 25,000 accounts linked to Russian individuals

Following the invasion of Ukraine, some Russian citizens moved their money into crypto wallets to protect it against the plummeting value of the country’s currency known as Rubles. On the other hand, Ukrainians did so after their government declared martial law and suspended e-money transactions, including Venmo and PayPal. However, on 6th March 2022, Coinbase, one of the biggest crypto exchanges, banned 25,000 wallet addresses belonging to Russian individuals. These wallet addresses, according to Coinbase, are believed to be involved in illegal activity.

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According to the chief legal officer of Coinbase, Paul Grewal stated that after investigations were carried out, the company further shared the wallet addresses with the US government to help sanction enforcement. Sanction enforcement will allow the ban on financial transactions by several Russian companies. Before the ban of the 25,000 accounts by Coinbase, several cryptocurrency exchanges have resisted pressure from Ukraine’s government, the US, and European politicians to ban Russian users of crypto platforms. 

Meanwhile, Binance, which is the world’s biggest cryptocurrency exchange, highlighted the effects of freezing/banning the accounts of Russian users. 

We are not going to freeze the account of million users unilaterally; Crypto is meant to provide greater financial freedom for people around the World,” it added. “To Unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists.” 

However, it admitted that it would only take the necessary steps against those who have sanctions levied against them to minimize the impact on innocent users. 

Is Russia using Crypto to evade sanctions?

Since the invasion of Russia on Ukraine commenced, the country’s financial state has hit a brick wall; the United States has blocked Russia’s central bank from transacting in dollars and limiting the country’s access, Switzerland has frozen Russian financial assets, in addition to this seven Russian banks have been cut off from SWIFT [the leading messaging network through which international payment are initiated]. While all this transpired, it is one of the top factors that made Russia turn to cryptocurrency. There are theories and suspicions that the country is trying to evade further sanctions using Crypto. However, research and specific analysis hinder the supposed move by Russia in using Crypto to evade sanctions. 

Firstly, cryptocurrency is stated to be highly conspicuous. Cryptocurrencies keep transactions on publicly accessible blockchain – a database that stores information electronically. This blockchain allows the traceability of illicit transactions [something similar has already played out with Coinbase]. Another reason Russia can’t evade sanctions is that the country is deeply ingrained in the international financial system. The government has more than 80 percent of its daily foreign exchange transactions, and over half of its trade is conducted in Dollars.

Trading platforms like Kraken and Kucoin join Binance in their stand against freezing the account of every Russian. Kraken and Kucoin cite their reason; for them to freeze any account, there has to be a legal requirement.

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About The Author

Obinna

Obinna is a fiction writer from Lagos, Nigeria, and grew up loving comic book characters and superheroes. He watches lots of action films and writes entertainment and technology articles. He is also interested in science and how things work.

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