Sanctions: only traditional finances or crypto world too?
The 24th of February became the blackest day in the 21st century not only for Ukraine but for the whole world. After Vladimir Putin’s speech and announcement of “Special Military Operation in Ukraine” Russian military started a full-scale armed invasion of Ukraine.
While hiding behind the shields “demilitarisation” and “denazification” of Ukraine “rescuers” are bombing cities and towns – as a result, numbers of innocent people were killed or heavily injured- and ruining the infrastructure and economy of the country – people in order to safe their children have to leave their motherland and move to Europe, the majority of countries condemned the actions of the aggressor country and imposed economic sanctions.
The United States, European Union, United Kingdom, Japan, Switzerland and many countries took measures and apply restrictions and sanctions against Russian Federation to affect the actions of the Russian government and immediately stop the military actions in Ukraine. Economic sanctions – SWIFT sanctions, ban of doing business and/or competing transactions with Russian banks - are not the only and final but its‘ application is already reflected on the economy of the Russian Federation. As a result of imposed sanctions, the fall of Ruble became a painful blow. “Russia is already paying a price for its aggression.“ – states CNN Business.
At the time while economic sanctions are applied to structures of traditional banks and finances, the rumors in the crypto world are growing. In solidarity with Ukrainians, a big number of crypto exchanges have already restricted or banned access on their platform to users from Russia and Belarus (Belarus government supporting the Russian invasion of Ukraine).
Such measures were taken to avoid loopholes in the cryptosystem and not create favorable conditions for Russian businesses to bypass the sanctions. According to Thomson Routers Foundation „, Russian households and businesses have rushed to convert roubles into foreign currency, while some are scrambling to invest savings into crypto. Trading volumes between the rouble and cryptocurrencies jumped three-fold on Monday from a week earlier, according to market data provider CryptoCompare.“
Despite the earlier discussions around the future of crypto and the proposal to ban it in Russia, now it seems to be the only way to “safe funds”. In one of the latest interviews regarding this question Vladimir Putin has commented “Of course, we also have certain competitive advantages here, especially in the so-called mining.”
“Putin’s doubts about a full crypto-embargo might well have deepened after the west applied massive pressure to Russia’s financial system with new sanctions.“ – The Guardian claims. While cryptocurrencies could be used by Russia as an alternative payment method, the Russian military is going to continue its invasion.
However, such big crypto exchanges like Binance or Kraken refuses to fully ban the account of Russian and Belarus residents justifying their actions that ordinary Russians do not want a war and they do not support the actions of their government. “Crypto exchanges don't sanction Russia's normal people. Crypto exchanges don't follow sanction rules.” – posted on his Twitter CEO of Binance Changpeng Zhao.
Brian Armstrong, the CEO of Coinbase in his Twitter said “In addition, we are not preemptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise.”
Unlike the exchanges mentioned above the CEO of Ripple Brad Garlinghouse doubts whether the cryptocurrency alone will not be used as a shield to circumvent sanctions. Also, he stated that based on the AML/KYC policy there is a restriction to provide services for countries that are under the sanction list. “Ripple and our customers support and enforce OFAC laws and KYC/AML.” – he stated on his Twitter.
Crypto trading platform STEX decided to temporarily restrict the access to the accounts of users from the Russian Federation and Belarus until the situation will change – the armed forced invasion will be stopped. Users from Russia and Belarus cannot withdraw their funds or create new accounts.
STEX Team, with all indifferent people, supports Ukrainians affected by the Russian invasion. If you want to join and support Ukrainian you may donate to the International Charitable Foundation “COME BACK ALIVE” https://savelife.in.ua/en/donate/ or you can make a direct crypto transfer
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Glory of Ukraine!