Are sanctions being used as a reason to condemn crypto?

Sahana Kiran
Source – Unsplash

Crypto inadvertently became entangled in the conflict between Ukraine and Russia. Russian forces set fire to Ukraine in what is being referred to as the third world war. Vladimir Putin, Russia’s President, remained untethered despite the world’s denunciation of his acts. But, one might wonder, how is crypto important in this context. Crypto did play a significant part in the battle.

Donations poured in from all around the world to help war-torn Ukraine. Cryptocurrencies were a popular way to send out donations. The entire amount of cryptocurrency donations inched close to $100 million. This was predictable, given the digital metamorphosis we’re presently undergoing.

The other reason for crypto being dragged into this was government officials from across the globe. Sanctions against Russia were imposed by almost every country. The world decided to handicap Russia by meddling with its finances. However, the only concern of almost every lawmaker was crypto. Time and again officials came forward to talk about how Russians could use crypto to evade sanctions.

Democratic Senator Elizabeth Warren even went on to roll out a bill into Congress regarding Russian crypto transactions. More recently, the President of the European Central Bank [ECB], Christine Lagarde spoke about her concerns about the evasion of sanctions via crypto.

During the Bank for International Settlements’ Innovation Summit, Lagarde outrightly suggested that cryptocurrencies continued to emerge as a threat. Lagarde was spitting facts. She pointed out the number of Russian rubles poured into Bitcoin and said,

“So is it a threat? Yes. Has it … been a threat in the past? Yes, because when you look at a lot of the dubious transactions that are taking place, a lot of the criminal activities payments that are taking place, very often you find some crypto assets.”

Will crypto continue to be linked to criminal activities?

Bitcoin and other cryptocurrencies have time and again been linked to criminal activities. However, over the years, cryptocurrencies have proved to entail utility and value. The adoption rate of crypto has skyrocketed and officials still seem to be appalled by them. Lagarde’s latest statement says it all.

Binance and an array of other exchanges have affirmed that they have been abiding by all the regulations and sanctions put in place amidst the war. Therefore, it is highly unlikely that Russians could circumvent the sanctions put in place. Binance’s CEO Chnagpeng Zhao even said,

“I think there’s a misunderstanding that people think we don’t sanction those people on the sanction list. That will be bad and people will go to jail for that so we follow the sanction list very, very closely.”

As this misconception prolongs it was speculated that sanctions were being used as a mere excuse to thrash crypto.