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Chainalysis: No, Putin is not avoiding sanctions with cryptos

Is Putin's Russia Really Bypassing International Sanctions With Cryptocurrencies?

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Is Putin’s Russia Really Bypassing International Sanctions With Cryptocurrencies?

Since the start of the invasion of Ukraine, sanctions have been imposed on Russia by Western states. This raises a big question: are the Russians using cryptocurrency to circumvent these actions? According to Jonathan Levin, co-founder of Chainalysis, the answer is no.

 

  • Increased monitoring _
  • Regulators work hand in hand
  • Cryptocurrency and Humanitarian Aid

New Tools To Control Crypto Currencies

Increased monitoring of accounts at risk of engaging in criminal activity currently applies. The objective: to ensure that Russia does not escape the repressive measures that have been in place for several weeks now. Proof that the geopolitical situation does indeed have an impact on the blockchain. Since the beginning of the crisis, cryptocurrency exchanges have had to choose whether or not to block their activity in Russia. If they choose to continue to practice their activity there, it is imperative that they comply with the demands of the regulators.

It is up to audit companies like Elliptic and Chainalysis to oversee this constant monitoring. This crucial role is explained by their role as advisers and financial partners. Jonathan Levin also explains that the measures taken could not be more serious. To limit the risk of misuse of restrictive measures, the entry and exit points of cryptocurrency in Russia are closely observed. Monitoring the volume of transactions and their liquidity helps to assess how economic sanctions influence the ratio of the population to cryptos.

And according to Levin, the balance sheet is rather positive for the moment. There is no evidence that cryptocurrency is being used to circumvent penalties imposed on Russians. According to him, the fears of recent weeks on this subject are therefore, for the moment, unjustified.

 

Union Of Regulators

 

This strengthening of the surveillance of dematerialized transactions in Russia proves one thing: regulators are largely able to work in harmony when it comes to countering possible overflows, despite the tight timing imposed on them by the current situation. . According to Jonathan Levin, this is proof that regulators around the world are well able to agree on the sanctions to be applied in the event of the misuse of crypto-currencies.

The Ukrainian crisis has highlighted the importance of scrupulously regulating the use of dematerialized currencies. This stricter vigilance seems to prove that as long as it remains under control, the crypto system has its place in Western economies. Because one of the criticisms most often addressed to cryptocurrency is that its lack of regulation makes it more susceptible to all kinds of abuses. However, this close surveillance tends to prove the contrary.

 

When Cryptos Join Forces With Humanitarians

 

On the Ukrainian side, donations in the form of crypto-currencies have been raining since the start of the invasion. Indeed, the Ukrainian government quickly began to receive funds from all over the world.

These are used for humanitarian purposes, namely to buy food. The tokens collected also helped the country finance the purchase of military equipment. This wave of solidarity called “crypto-resistance” follows appeals for donations launched by the Ukrainian government. These are collected directly by the government or by the Crypto Fund for Ukraine created by the Ukrainian platform Kuna.

According to data from SlowMist, donations sent to Ukraine in the form of cryptocurrencies amount to more than 90 million dollars! AFP speaks of more than 100 million dollars collected by the country. Whatever the exact figure, the essential is there. The sums donated to the Ukrainian government are colossal, and they were raised in record time. The explanation for this speed is simple: to send or receive these dematerialized currencies, all it takes is a few clicks.

The two cryptos received in the largest numbers by the government and the Crypto Fund of Ukraine are, unsurprisingly, Bitcoin and Ethereum.

Donors also participated in the form of tether, because the latter has the merit of being little fluctuating thanks to its quality of stablecoin. The frenzy of donations has subsided in recent weeks, but the amount of transactions was particularly large at the start of the conflict, rising from 20 million to 50 million dollars sent in just three days, between February 27 and March 2.

It should also be noted that the central role that crypto has taken in the Ukrainian economy has precipitated its legalization. Indeed, Volodymyr Zelensky has endorsed a law legalizing the crypto-currency sector within the country. This law was approved last month by Ukrainian parliamentarians. The adoption of the project is the starting point “for the launch of a legal market of virtual assets in Ukraine”.

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