Russia can evade sanction through cryptocurrencies

[bustabitsboy]

The Russia's central bank wanted cryptocurrencies to be banned in its country but the Russian president, Vladimir Putin said bitcoin mining and other crypto mining will be beneficial for Russia. Some people at that time have been supectimg this could be a move by the Russia's president that he is planning to invade Ukraine which will result to sanctions, thinking cryptocurrencies would be a means to evade sanctions and make it economically less effective.

Ukrainian Vice Prime Minister Mykhailo Fedorov demand crypto exchanges to freeze all Russian accounts so that the sanction can be effective, but most exchanges did not support this. I read few days ago that cryptocurrencies may not help in Russia sanction but FinCEN concluded that Russia can attempt to use cryptocurrencies to evade sanctions.

FinCEN Provides Financial Institutions with Red Flags on Potential Russian Sanctions Evasion Attempts

What is your take? What role can cryptocurrencies play in helping Russia sanctions evasion and to what extent can this be?

Ukrainian Vice Prime Minister Mykhailo Fedorov would like to freeze all of Russia completely    Russia can use mining. I think it's a matter of time. Russia may use crypto exchanges that do not comply with sanctions or do not have control systems. This is one of the well-known options for circumventing sanctions.

[Fortify]

The Russia's central bank wanted cryptocurrencies to be banned in its country but the Russian president, Vladimir Putin said bitcoin mining and other crypto mining will be beneficial for Russia. Some people at that time have been supectimg this could be a move by the Russia's president that he is planning to invade Ukraine which will result to sanctions, thinking cryptocurrencies would be a means to evade sanctions and make it economically less effective.

Ukrainian Vice Prime Minister Mykhailo Fedorov demand crypto exchanges to freeze all Russian accounts so that the sanction can be effective, but most exchanges did not support this. I read few days ago that cryptocurrencies may not help in Russia sanction but FinCEN concluded that Russia can attempt to use cryptocurrencies to evade sanctions.

FinCEN Provides Financial Institutions with Red Flags on Potential Russian Sanctions Evasion Attempts

What is your take? What role can cryptocurrencies play in helping Russia sanctions evasion and to what extent can this be?

Ukrainian Vice Prime Minister Mykhailo Fedorov would like to freeze all of Russia completely    Russia can use mining. I think it's a matter of time. Russia may use crypto exchanges that do not comply with sanctions or do not have control systems. This is one of the well-known options for circumventing sanctions.

It will actually be more of a hindrance to the long term success of cryptocurrency if Russia started using it more in an attempt to bypass sanctions or earn new sources of revenue. It would slowly bring the attention of more politicians if they discovered it was supplying a source of revenue, or way for them to move around money outside of the traditional banking system which has them pretty cut off. Once those sirens start going it might very quickly lead to bans on wider usage, along with the guise of energy preservation, which would be extremely damaging for any current holders of cryptocurrency. Let's hope Putin continues to discourage it's use and mining.

[iged_war]

Ukrainian Vice Prime Minister Mykhailo Fedorov would like to freeze all of Russia completely    Russia can use mining. I think it's a matter of time. Russia may use crypto exchanges that do not comply with sanctions or do not have control systems. This is one of the well-known options for circumventing sanctions.

since beginning Rusia want use cryptocurrency as alternative payment from any trades if sanction from any countries come. Mr president also know how big crypto potency for their income by taxes and other regulations. even Ukranian get benefit from donation that used cryptocurrency, and from here we know how usefull this currency when all central bank suspend each others.

[Sithara007]

since beginning Rusia want use cryptocurrency as alternative payment from any trades if sanction from any countries come. Mr president also know how big crypto potency for their income by taxes and other regulations. even Ukranian get benefit from donation that used cryptocurrency, and from here we know how usefull this currency when all central bank suspend each others.

I don't see significant activity related to cryptocurrency in the ongoing war between Russia and Ukraine. Initially there were some fundraisers for Ukraine, which accumulated a few million USD worth of crypto, but nowadays I am not hearing much about it. And there were also reports of Russia using cryptocurrency to evade sanctions. But I haven't found any concrete evidence for this. There is hardly any uptick in the crypto volumes within Russia. So there is no supporting evidence to claim something like this.

[be.open]

since beginning Rusia want use cryptocurrency as alternative payment from any trades if sanction from any countries come. Mr president also know how big crypto potency for their income by taxes and other regulations. even Ukranian get benefit from donation that used cryptocurrency, and from here we know how usefull this currency when all central bank suspend each others.

I don't see significant activity related to cryptocurrency in the ongoing war between Russia and Ukraine. Initially there were some fundraisers for Ukraine, which accumulated a few million USD worth of crypto, but nowadays I am not hearing much about it. And there were also reports of Russia using cryptocurrency to evade sanctions. But I haven't found any concrete evidence for this. There is hardly any uptick in the crypto volumes within Russia. So there is no supporting evidence to claim something like this.

You are right, although the rhetoric of the Central Bank of Russia has softened significantly in relation to cryptocurrencies (against the background of the initial intentions to completely ban them), but Russia's interest in cryptocurrencies lies more in the plane of mining - as a good opportunity to utilize excess energy resources than as a tool to circumvent sanctions. It seems that Russia has learned to live well under the conditions of permanent sanctions, which intensified in 2014 after the annexation of Crimea, including how to circumvent them.

[ningrum]

since beginning Rusia want use cryptocurrency as alternative payment from any trades if sanction from any countries come. Mr president also know how big crypto potency for their income by taxes and other regulations. even Ukranian get benefit from donation that used cryptocurrency, and from here we know how usefull this currency when all central bank suspend each others.

I don't see significant activity related to cryptocurrency in the ongoing war between Russia and Ukraine. Initially there were some fundraisers for Ukraine, which accumulated a few million USD worth of crypto, but nowadays I am not hearing much about it. And there were also reports of Russia using cryptocurrency to evade sanctions. But I haven't found any concrete evidence for this. There is hardly any uptick in the crypto volumes within Russia. So there is no supporting evidence to claim something like this.

Looks like it's just news and rumors so we can't find any real evidence,
because if it is true that Russia uses crypto to evade sanctions then there should be traceable evidence,
The most important thing is to just keep up with the developments

[Abiky]

It will actually be more of a hindrance to the long term success of cryptocurrency if Russia started using it more in an attempt to bypass sanctions or earn new sources of revenue. It would slowly bring the attention of more politicians if they discovered it was supplying a source of revenue, or way for them to move around money outside of the traditional banking system which has them pretty cut off. Once those sirens start going it might very quickly lead to bans on wider usage, along with the guise of energy preservation, which would be extremely damaging for any current holders of cryptocurrency. Let's hope Putin continues to discourage it's use and mining.

Yes. Russia embracing crypto just to avoid economic sanctions, will give a bad picture of the whole industry. This will force countries to take drastic measures against crypto/Blockchain tech in order to minimize its growth worldwide. I'd prefer Russia to steer clear from crypto in order to prevent other countries from declaring it "illegal" for mainstream use. Of course, crypto will still survive because of its decentralized and censorship-resistant design. But it wouldn't be as widely used as before since people will be afraid of getting into it in order to avoid being prosecuted by the government. No one knows what's in Putin's mind right now so we can only hope for the best. Just my thoughts

[jaberwock]

Russia embracing crypto just to avoid economic sanctions, will give a bad picture of the whole industry. This will force countries to take drastic measures against crypto/Blockchain tech in order to minimize its growth worldwide. I'd prefer Russia to steer clear from crypto in order to prevent other countries from declaring it "illegal" for mainstream use. Of course, crypto will still survive because of its decentralized and censorship-resistant design. But it wouldn't be as widely used as before since people will be afraid of getting into it in order to avoid being prosecuted by the government. No one knows what's in Putin's mind right now so we can only hope for the best. Just my thoughts

I do not think that is true, countries are not going to decide to ban cryptocurrency just for the fact that Russia is making use of it. Moreover we are not even sure of all these things that people are saying, although we do know for sure that they declared it legal in their country and that cryptocurrency mining is also allowed.

But, what I would want to say is that no country would be banning cryptocurrency just for this, countries who would ban cryptocurrency will do that with or without Russia making use of it. And countries that want to accept it will also do the same. Do not forget that during the war between Ukraine and Russia, cryptocurrency was put to a good use and a lot of people were able to use it to donate in support of Ukraine.

[Sithara007]

You are right, although the rhetoric of the Central Bank of Russia has softened significantly in relation to cryptocurrencies (against the background of the initial intentions to completely ban them), but Russia's interest in cryptocurrencies lies more in the plane of mining - as a good opportunity to utilize excess energy resources than as a tool to circumvent sanctions. It seems that Russia has learned to live well under the conditions of permanent sanctions, which intensified in 2014 after the annexation of Crimea, including how to circumvent them.

This is the same strategy that was used by Iran to evade sanctions, and it worked out pretty well for them. But after a few months, Iran faced crippling power shortages and was forced to impose restrictions on cryptocurrency mining. I don't think that Russia faces any such issue, as they have surplus electricity. The only issue is that they need to import the mining and cooling equipment from China. But even that should not be a problem, since Russia is having very strong economic relationship with their southern neighbors.

[Emitdama]

You do know that only Russians who are making use of centralized exchanges would have their cryptocurrency accounts frozen? Only exchanges such as Coinbase, and the rest of them which are being regulated can carry out such activity, but that wouldn’t be the same for When it is an unregulated or a decentralized exchange. Decentralized exchanges are not controlled by anyone, and users are free to do whatever they want to do without any restrictions.

So, such action might have been taken but it wouldn’t be all Russians that were affected, because there would be some of them who are making use of decentralized exchanges.

[Joshapat]

Russia has various ways to avoid sanctions, especially since Russia has a gas that is needed by Europe, Crypto planned for payment of Russian gas contracts will be very helpful and make Crypto's marketing will rise significantly because the volume of very large gas transactions can reach hundreds of billions per month.

[kamilah147]

Russia embracing crypto just to avoid economic sanctions, will give a bad picture of the whole industry. This will force countries to take drastic measures against crypto/Blockchain tech in order to minimize its growth worldwide. I'd prefer Russia to steer clear from crypto in order to prevent other countries from declaring it "illegal" for mainstream use. Of course, crypto will still survive because of its decentralized and censorship-resistant design. But it wouldn't be as widely used as before since people will be afraid of getting into it in order to avoid being prosecuted by the government. No one knows what's in Putin's mind right now so we can only hope for the best. Just my thoughts

I do not think that is true, countries are not going to decide to ban cryptocurrency just for the fact that Russia is making use of it. Moreover we are not even sure of all these things that people are saying, although we do know for sure that they declared it legal in their country and that cryptocurrency mining is also allowed.

But, what I would want to say is that no country would be banning cryptocurrency just for this, countries who would ban cryptocurrency will do that with or without Russia making use of it. And countries that want to accept it will also do the same. Do not forget that during the war between Ukraine and Russia, cryptocurrency was put to a good use and a lot of people were able to use it to donate in support of Ukraine.

Yes that's correct. it is not correct to say that crypto also imposed sanctions on Russia for invading Ukraine. Although I have also heard rumors that crypto will freeze all wallets of crypto holders from Russia, I don't think this will happen. Crypto is not regulated by any country. And there is no solid evidence that Crypto was also involved in sanctioning Russia. actually there are many benefits of crypto during the war, I have always believed that crypto is a platform to keep money safe from various government politics in the country ranging from inflation to even being useful in distributing donations to war victims as it is today.

[BuNga_cute]

Russia has various ways to avoid sanctions, especially since Russia has a gas that is needed by Europe, Crypto planned for payment of Russian gas contracts will be very helpful and make Crypto's marketing will rise significantly because the volume of very large gas transactions can reach hundreds of billions per month.

Russia doesn't go to war with Ukraine if they are afraid of international sanctions, I even believe that before starting the war the Russians had
calculated the worst that would happen to them. After all, the sanctions that Russia has now received are not the first time, Russia has been
under sanctions before, so they must have experience dealing with them. As you said Russia has several avenues to deal with these international
sanctions, maybe crypto can be a solution for Russia in conducting transactions. Which some of the world's financial institutions freeze all
transactions related to Russia, so by using crypto, Russia can still carry out financial transactions and can avoid sanctions. Then we can't blame
crypto for that, because crypto depends on the user, there are still many positive things that crypto can give.

[Abiky]

You do know that only Russians who are making use of centralized exchanges would have their cryptocurrency accounts frozen? Only exchanges such as Coinbase, and the rest of them which are being regulated can carry out such activity, but that wouldn’t be the same for When it is an unregulated or a decentralized exchange. Decentralized exchanges are not controlled by anyone, and users are free to do whatever they want to do without any restrictions.

So, such action might have been taken but it wouldn’t be all Russians that were affected, because there would be some of them who are making use of decentralized exchanges.

Exactly. It would be foolish enough to use centralized exchanges when they're required by law to comply with government regulations. Russians have no other choice but to use decentralized exchanges or P2P trading platforms in order to get access to crypto. Of course, this will be quite a challenging task to achieve since alternative methods have a certain number of limitations behind them.

How will Russia be able to trade crypto to Ruble or vice versa effectively through decentralized alternatives is a mystery. Even if the government doesn't approve the use of crypto among its citizens, it can still use it in secret to evade sanctions. The US and EU are aware of this, so they're tightening regulations with the hopes of preventing Russia from gaining access to crypto as much as possible. They won't succeed completely (due to crypto being decentralized), but at least they will have a certain impact over the Russian economy. The future doesn't seem bright for Russia, so citizens should be prepared for the worst. Just my opinion

[darewaller]

Russia has various ways to avoid sanctions, especially since Russia has a gas that is needed by Europe, Crypto planned for payment of Russian gas contracts will be very helpful and make Crypto's marketing will rise significantly because the volume of very large gas transactions can reach hundreds of billions per month.

It would be very helpful but by the end of the day we are talking about Russia wanting ruble to get a lot more attention and used hence why crypto probably won't be used so much. Everyone wanted Russia to use bitcoin for this situation and like use it for hundreds of billions of dollars worth of deals but the reality is that it would have helped Europe because nobody would have dealt with Ruble in that case.

Thanks to them ignoring crypto and focusing more on Ruble and demanding Ruble payments for the transactions, that resulted with Russia to keep their money valuable. I mean imagine being sanctioned off and hated by the whole world and still keeping a good economy, that is a success if you ask me.

[Bitcoinpoly]

Cryptocurrencies can be decentralized but centralized exchanges and centralized wallets are not decentralized, only centralized exchanges and wallets is what I are talking about. For people that are using decentralized wallets, there is nothing because the have the control, not the exchanges. But Russians can turn to decentralized means though.

Even from Binance CEO Changpeng Zhao himself saying that cryptocurrencies won’t help evade sanctions.  

But from my own perspective, Russia can possibly evade sanctions if they turn towards full decentralization or exchanges refusing to ban Russians from using their respective platforms. Like for instance, mandating all businesses to accept crypto payments by using non-custodial wallets.

No matter what CZ says, it needs to be noted that CZ denied blocking Russian accounts from Binance through a rightful decision. So not sure why he thinks that cryptos can't help Russia evade the sanctions.

Russia can certainly try this. But considering the global sentiment is against Russia right at this moment, it may not be beneficial for them. Their internal economy can be supported by cryptos but the global trade won't go through crypto route.

Similar issue of this nature is already playing out in the situation between Israel and Iran. BingX has been called out to be rendering some sort of support to the Iranians by allowing them carry out transaction which is aiding their terrorist actions, this obviously is against the rules by the regulatory bodies.

[Best-mary]

Cryptocurrencies can be decentralized but centralized exchanges and centralized wallets are not decentralized, only centralized exchanges and wallets is what I are talking about. For people that are using decentralized wallets, there is nothing because the have the control, not the exchanges. But Russians can turn to decentralized means though.

Even from Binance CEO Changpeng Zhao himself saying that cryptocurrencies won’t help evade sanctions.  

But from my own perspective, Russia can possibly evade sanctions if they turn towards full decentralization or exchanges refusing to ban Russians from using their respective platforms. Like for instance, mandating all businesses to accept crypto payments by using non-custodial wallets.

No matter what CZ says, it needs to be noted that CZ denied blocking Russian accounts from Binance through a rightful decision. So not sure why he thinks that cryptos can't help Russia evade the sanctions.

Russia can certainly try this. But considering the global sentiment is against Russia right at this moment, it may not be beneficial for them. Their internal economy can be supported by cryptos but the global trade won't go through crypto route.

Similar issue of this nature is already playing out in the situation between Israel and Iran. BingX has been called out to be rendering some sort of support to the Iranians by allowing them carry out transaction which is aiding their terrorist actions, this obviously is against the rules by the regulatory bodies.

Seems like isn't a fair play either because from the comment section, someone wrote about Coinbase banning some Russia account. Meanwhile the cex you mentioned I learnt they have no kyc it can actually lead to illegal activities. Not like all of them are into illegal act but the case in which kyc isn't needed to withdraw a huge amount of money is quite alarming

[Argoo]

Russia has various ways to avoid sanctions, especially since Russia has a gas that is needed by Europe, Crypto planned for payment of Russian gas contracts will be very helpful and make Crypto's marketing will rise significantly because the volume of very large gas transactions can reach hundreds of billions per month.

The uniqueness of today's Russia lies in the fact that there are written laws for citizens, but unwritten ones for the elite and Putin's entourage. Colossal amounts of money are now being spent on the war in Ukraine, and Putin, in order to remain in power, only has to increase spending on it. Therefore, they are forced to put pressure on businesses and ordinary citizens, and to prevent capital from leaving the country, to prohibit the full use of cryptocurrency.

At the same time, with the approval of Putin, cryptocurrency is clearly used there, including to circumvent sanctions and carry out various financial transactions, where this is, of course, possible. This forum has already discussed Russia's crypto-currency assistance to Hamas before their attack on Israel in October last year. Undoubtedly, there are many such examples.

[Abiky]

The uniqueness of today's Russia lies in the fact that there are written laws for citizens, but unwritten ones for the elite and Putin's entourage. Colossal amounts of money are now being spent on the war in Ukraine, and Putin, in order to remain in power, only has to increase spending on it. Therefore, they are forced to put pressure on businesses and ordinary citizens, and to prevent capital from leaving the country, to prohibit the full use of cryptocurrency.

At the same time, with the approval of Putin, cryptocurrency is clearly used there, including to circumvent sanctions and carry out various financial transactions, where this is, of course, possible. This forum has already discussed Russia's crypto-currency assistance to Hamas before their attack on Israel in October last year. Undoubtedly, there are many such examples.

Exactly. Who's to say government officials are using crypto to circumvent sanctions? I'd bet Putin and Russian oligarchs are already doing this. Of course, citizens will be prohibited from doing such a thing. It's what usually happens in authoritarian countries. I think China is in the same boat.

There's nothing the West can do to stop this, especially when crypto/Blockchain tech is decentralized. They'd need to shut down the whole Internet to make it happen. But you and I know that's impossible. Maybe crypto will become the main source of funding for Putin's "war machine" in the long run?