Similar to how ECB President Hillary Clinton believes Russians can use cryptocurrencies to circumvent financial sanctions.

The former US presidential candidate has criticized digital fund investment trading platforms for refusing to stop serving Russian users. She reiterated that digital assets should be placed under a regulatory framework.

Hillary Clinton

“Cryptocurrency should not be a way out for Russia”

In the midst of the Russian invasion, Mykhailo Fedorov, Deputy Prime Minister of Ukraine, ordered leading digital asset platforms to freeze the blockchain addresses of all Russian users. According to this politician, this move will weaken Russia and help defend Ukraine.

In a recent interview for MSNBC, former first lady Hillary Clinton said she was “disappointed” that some exchanges still offer services to Russian users:

“I’m very disappointed to see some crypto exchanges, not all but some of them refuse to block trades with Russia because of a philosophy of libertarianism or whatever.”

In her view, people should do “as much as possible” to isolate Russia’s economic activity.

“This pressure will absolutely affect Putin. I think the Treasury, I think the Europeans should look at how to prevent the crypto market from giving Russia an exit.”

Exchanges still serving Russia-based traders include Binance, Coinbse, and Kraken. The organizations argued that most of these users were against war and that freezing their accounts would go against the perception of the crypto industry.

Experts say it’s not feasible

Crypto policy experts say that prominent politicians’ concerns that Russia could sidestep economic sanctions using cryptocurrencies are “completely unfounded.”

They say the crypto market isn’t anywhere near big or deep enough to support the volumes Russia needs, and that the country’s digital asset infrastructure is very small.

Russia has been cut off from the SWIFT cross-border trading system and from doing business in the US and other Western countries forbidden Do business or do business with Russian banks and sovereign wealth funds.

Jake Chervinsky, Head of Policy at the Blockchain Association’s agency for promoting cryptocurrency policy in the United States, published a topic Long took to Twitter on March 2, stating that “Russia cannot and will not use cryptocurrencies to circumvent sanctions.”

Chervinsky gave 3 reasons why Russia is unlikely to use cryptocurrencies to circumvent US sanctions.

• First, the sanctions are not limited to the USD and it is now illegal for US companies or citizens to do business with Russia. “It doesn’t matter if they use dollars, gold, shells or bitcoin,” he said.
• The second reason is that the financial needs of a country like Russia far exceed the current capacity of the cryptocurrency market, which Chervinsky describes as “too small, expensive and transparent to be of any use to the Russian economy”. In other words, even if Russia could access enough liquidity, it still wouldn’t be able to hide its transactions in such a market.
• Ultimately, the country has tried for years but failed to build any meaningful crypto infrastructure or even perfect crypto regulations. Chervinsky said that cryptocurrencies don’t appear to be part of the plan to mitigate the effects of Russian sanctions.

Other experts argue that Russia’s case differs from sanctions evasion and asset hiding by North Korea, Venezuela, and Iran due to the level of sanctions, slow cryptocurrency adoption rates, and lack of market depth.

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