Cryptocurrencies Can’t Help Russia Evade Sanctions: Report

Cryptocurrencies can’t help Russia evade sanctions contrary to the warnings of statesmen worldwide as we can see more today in our latest crypto news.

Cryptocurrencies can’t help Russia evade sanctions as they are a bad tool for hiding money. In response to the ongoing invasion of Ukraine by Russia, the US enacted a set of economic sanctions targeting the Russian government and its members, but also businesses associated with the Kremlin. Shortly after these sanctions were announced, Senator Elizabeth Warren retweeted an article from the New York Times suggesting that cryptocurrencies can help Russia evade sanctions adding her voice to those that claim crypto will offer Putin a bypass for the sanctions.

Sanctions impose legal restrictions on one’s ability to transact with sanctioned invidious or businesses and these sanctions evasion does not refer to the sanctioned ability to won an asset but rather to a US person who will evade their obligation not to transact with or facilitate transactions with those that are sanctioned. For digital assets to serve as a tool of sanctions, they will have to allow US people to transact with the sanctioned entities without incurring consequences or exposing the activity to law enforcement.

Despite the efforts and intense scrutiny, the financial system has never come close to denying illicit actors’ use of financial services. The assessments by the US governments estimated that the illicit economy is huge and amounted to more than a trillion dollars and hit an amount of illicit financial activity and disrupted by law enforcement. Cryptocurrencies can be used for illicit activity but the reality is that digital assets are harder to exploit for these purposes at scale than the traditional ecosystem.

Examples of how the transparency trips up criminals about, in the past few weeks, two of the biggest crypto hacks in history like the Bitfinex hack and the DAO hack which was solved by analyzing the on-chain data. The hack occurred years ago and the data necessary to trace the hackers remained available to law enforcement and anyone else that has an internet connection. The government is looking for a crypto-based illicit financial activity like sanction evasion and it is becoming very good at finding it so in short, sanctions compliance is alive in the world of crypto.

In congressmen like Senator Warren are truly concerned about crypto facilitating sanctions on a broad scale, there are a few other steps that can be taken and prevent that from becoming a reality. One of them is to make sure that crypto networks and DEFI can continue developing in the US which will give the government a chance to develop sanction compliance tools in the digital asset markets.