Russia, sanctions, crypto—yes, three words that have informed one of the most discussed topics in the crypto space this week.
We know that Russia invaded Ukraine and the war is on. This in turn has attracted strict sanctions from European countries and the United States.
And in the midst of all this, there is a simple hypothesis that crypto could provide a way for Russian oligarchs to circumvent sanctions. Of course, crypto should be able to do this, given that there are inherent features in the growing technology.
But it won’t be easy and Coinbase CEO Brian Armstrong shares his thoughts on why not.
Why Coinbase thinks crypto won’t be the ideal Russian oligarch
According to Coinbase CEO Brian Armstrong, it is possible that a wealthy Russian close to President Vladimir Putin may try to evade US sanctions by using crypto.
Still, given the current circumstances surrounding Russia, crypto may not be what an oligarch is trying to remain anonymous or discrete, which would “stealth” access vast amounts of money.
And what makes it even more difficult is the need for liquidity to facilitate this on the largest exchanges—most of them available in the US and other major countries looking to enforce sanctions. Therefore, crypto businesses in these countries may comply with the law and make it difficult for Russians or sanctioned individuals.
Sharing his thoughts on the subject, the Coinbase chief said:
,Every US company has to comply with the law – it doesn’t matter whether your company handles dollars, crypto, gold, real estate or even non-financial assets. Sanctions laws apply to all American people and businesses. So it would be a mistake to think that crypto businesses like Coinbase would not comply with the law. of course we will,
He added that screening of clients is part of the law and the global watchlist provides useful information that helps exchanges flagged individuals, IP addresses, accounts or transactions.
Armstrong then explains why he doesn’t think “There is a high risk of Russian oligarchs using crypto to evade sanctions,
Why?
,Because this is an open ledger, trying to launder a lot of money via crypto would be more traceable than using US dollar cash, art, gold or other assets.,” he told.
Blockchain traceability and law-abiding will not make it easy for anyone to use cryptocurrencies to avoid sanctions.
In a webinar this morning, Carol House, the National Security Council’s director of cybersecurity, said the scale at which Russia would need to circumvent all financial sanctions “almost certainly makes cryptocurrencies an ineffective primary tool for the state.” will present.”
— Hannah Lang (@hannahdlang) 2 March 2022
Coinbase Won’t Block All Russians
There have also been calls to ban all Russians, including the Ukrainian authorities, from accessing services on crypto exchanges. But Armstrong says Coinbase will not take that step.
,We are not pre-banning all Russians from using Coinbase. We believe that everyone has the right to access basic financial services, unless the law states otherwise.” He mentioned.
According to him, doing so will impact those for whom crypto is a buffer when the ruble has experienced massive deflation.
“Many of them [ordinary Russians] They are likely to oppose what the country is doing, and the sanctions will hurt them as well.“They said.
But like other regulated companies and businesses, Coinbase follows the law and if the US government asks it to block or ban certain users, the firm will comply with said laws.
Armstrong summarized his view on the whole issue by saying that Coinbase will also work towards helping Ukrainians access the crypto services they need.