March 23, 2023

U.S. Issues Warning To Crypto Firms Allowing Russian Boycott Sanctions

After the numerous financial sanctions by the European Union, the United States, and their allies on Russia, there are fears that people and institutions in Russia would have no choice but to turn to cryptocurrency to avoid the restrictions. This dependence on cryptocurrency for transactions seems to be the case as there have been huge transactions recorded on the blockchain network after the sanctions. Also, the valuation of the Russian currency has decreased in the past few days, which is enough reason for citizens and institutions to switch to digital currencies. 

Sanctions Imposed By The United States Will Include Crypto 

The Treasury Dept. of the United States stated that as of the 1st of March, recent restrictions on Russia would include monitoring of virtual currencies. The U.S. government has also warned major cryptocurrency exchange firms to refrain from engaging with blacklisted entities.

In a directive set to be made public later on today, the Biden administration has mentioned that it will take measures against anybody who violates Russia’s sanctions. This also includes the usage of virtual currencies. The executive directive stated:

“All assets and interests in assets within America that will come into the country or that is in the control or custody of a U.S. citizen or the following individuals are now blocked. Also, they cannot be paid, transferred, or withdrawn….. fraudulent or organized transactions or business deals to bypass any United States restrictions, including via the usage of virtual currencies are also banned.”

Since Russia’s annexation of Ukraine launched last week, countries have placed sanctions on it. As stated in a weekend agreement, “certain Russian banks” would be barred from using the SWIFT payment gateway, and America will levy sanctions on the Central Bank of Russia and other funding sources.

Bloomberg reports that the U.S. government has ordered popular crypto exchanges to confirm that their systems are not being used to dodge sanctions by Russia.

Due to the restrictions, Russians will have restricted access to foreign currency, stifling its economic development and further isolating the state. The fresh wave of bans follows Russia’s assault of Ukraine, which led to fighting in Kyiv and neighboring areas.

This move by the U.S. follows after Fedorov, Vice prime minister of Ukraine, encouraged cryptocurrency exchange firms to prohibit Russian consumers in a tweet last week.

Crypto Exchanges Declines U.S. Request 

Exchange firms aren’t entirely in support of the decision by the U.S. Although Binance has stated that Russian accounts will not be banned, it has also indicated that it will ban Russian users who have been sanctioned.

According to a representative for the firm, cryptocurrency is “meant to enable more financial independence for individuals globally. A total ban under no legal condition will be unfair. 

With the increased case of inflation in Russia and the ruble’s devaluation, more Russians will have to turn to digital currency.

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