INSUBCONTINENT EXCLUSIVE:
Ukraine Crisis: The legal status of cryptocurrencies in Russia is in flux.Cryptocurrencies may help Russia and its billionaires blunt the
These aim to limit its ability to do business in dollars and other major international currencies, and include penalties on five Russian
banks that represent an estimated $1 trillion in assets
A broad swath of Russian elites and their family members will also be targeted
That's all in addition to penalties that were imposed earlier this week.But those sanctions might carry less weight in a country that is
taking steps to legalize cryptocurrencies and where the digital assets are already widely owned
Typically, nations employ physical workarounds to avoid sanctions, such as Venezuela and North Korea's use of ship-to-ship transfers of
at investment manager VanEck.Sanctions imposed on companies and individuals by the United States and its allies could essentially close
Billionaires, some of whom have already been targeted directly, potentially stand to circumvent those penalties if they choose to use
crypto, which uses blockchain technology to keep transactions anonymous
financial advisory firm Quantum Economics
that have the ability to track, freeze or block them, cryptocurrencies can potentially be sent from one person directly to another
regardless of any government sanctions or other restrictions.Crypto holders can also set up a web of wallets with different addresses across
several exchanges, making it extremely difficult to track any activity and even harder to tie transactions back to a particular individual
Additionally, they can choose cryptocurrency exchanges that are not based in jurisdictions that are imposing sanctions and therefore don't
necessarily have to adhere to regulations.But any assets held in crypto wouldn't be easily converted into fiat currencies, experts say,
making any money that trades hands less disposable
And in order to circumvent banks or even centralized exchanges that adhere to sanctions, individuals would have to convince any services
they are doing business with to accept digital payment, which could be difficult.The wealthy Russians who will be targeted with sanctions
prior to Thursday has so far publicly revealed whether they're crypto holders.To be sure, there are still ways for governments to impose
regulations on cryptocurrency holdings that exist on centralized exchanges, said David Tawil, president of crypto investment firm ProChain
He referred to the recent crackdown by the Canadian government on crypto accounts owned by truckers who were receiving funds to support
their blockades of United States -Canada border crossings and a weeks-long protest in the capital city of Ottawa.Assuming that money
laundering is easier via cryptocurrencies is a misconception, said Brett Harrison, president of crypto exchange FTX US
He explains that exchanges have access to certain technology that allows for tracking and screening of wallets that come from sanctioned
It would also be difficult for individuals to convert cryptocurrencies to fiat currencies through centralized exchanges without getting
several states and countries with subpoenas to seize funds from certain addresses, he said
The extent to which cryptocurrency can be traceable is visible from the recent arrest of two individuals related to the 2016 Bitfinex hack
The United States government was able to track the activity of certain wallets and as a result freeze the accounts as soon as they were
converted into fiat currencies.Crypto's StatusThe legal status of cryptocurrencies in Russia is in flux, with the government pushing to
permit them in order to attract foreign investment and bring domestic trading out of the shadows, while the central bank says they bear the
hallmarks of a pyramid scheme and should be banned
Putin last month ordered them to reach a quick compromise, but top government officials have so far failed to agree on how to regulate
cryptocurrencies, according to a recent government paper.More than 17 million Russians, or about 12% of the total population, are
cryptocurrency owners, according to data from Singapore-based payment gateway TripleA
And with more sanctions pending, it could be in Russia's interest to let rich individuals deal in crypto regardless of its legal
Tawil, explaining that even the United States has struggled to define the legal framework and regulations surrounding cryptocurrencies
Soviet Union are also paying more attention to crypto
Last week, the Ukrainian parliament backed a bill to legalize cryptocurrencies, while Kazakhstan is pushing to better regulate and tax its
booming crypto-mining industry.United States equities initially tumbled Thursday after Russia invaded Ukraine, with the S-P 500 Index
losing as much as 2.6% and the tech-heavy Nasdaq 100 extending its drop to 20% from its last record high in November
Stocks have since pared their losses, with the Nasdaq 100 turning positive
Bitcoin slumped as much as 8.5% to $34,337, bringing its decline to nearly 50% since its all-time high set in November.
