Bleu Finance
Wednesday, May 18, 2022
  • US Markets
  • World Stock Market
  • Cryptocurrency
  • Economy
Subscribe
Bleu Finance
  • US Markets
  • World Stock Market
  • Cryptocurrency
  • Economy
No Result
View All Result
Bleu Finance
No Result
View All Result
Home Economy

Russia can’t evade sanctions with crypto: Warren’s proposal only harms the US

by Kasper Lee
2 months ago
in Economy
0
Russia can't evade sanctions with crypto: Warren's proposal only harms the US
153
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter

One of the primary benefits of cryptocurrency is that it makes cross-border financial transactions faster, cheaper and more secure. In the wake of Russia’s unjustifiable invasion of Ukraine, skeptics in Congress are claiming that Russia could use crypto to evade the devastating economic sanctions imposed by the West.

Already, Sen. Elizabeth Warren (D-Mass.) and several Democratic co-signers introduced legislation to satisfy their fears and place unnecessary and burdensome restrictions on crypto. Here’s the good news: Those fears are entirely unfounded. Russia won’t use crypto to evade sanctions because it can’t.

To explain, let me first briefly explain what sanctions are, how crypto markets work and how Russia fits in.

Sanctions are a foreign policy tool used to influence behavior and punish foreign bad actors. In the U.S., sanctions originate from either the president or Congress, and then the Office of Foreign Assets Control (OFAC) designates specific targets of sanctions: individuals, companies, governments, banks and so on. From there, OFAC adds targets to the Specially Designated Nationals and Blocked Persons (SDN) list, which makes it illegal for any U.S. person or organization to interact with those on the list.

This is crucial. SDNs are blocked from accessing U.S. goods or services, selling products to U.S. buyers, owning U.S. property, or otherwise engaging in any way economically with American entities. Anyone who violates these rules has committed a federal offense.

Since the Russian invasion, the U.S. and its allies imposed severe sanctions that are already devastating Russia’s economy. Right now, most of Russia’s economy is cut off from all goods and services offered by the free world: Which brings me to crypto.

A collection of democratic senators believe Russia may use the technology to evade sanctions and gain access to global finance. To this end, Warren’s bill encourages the Biden administration to impose more burdensome restrictions on crypto, including secondary sanctions on a huge number of individuals and companies — including U.S. citizens — who have nothing to do with Russian SDNs.

This fundamentally misunderstands what crypto is and what it can do.

First, just because crypto is separate from the traditional financial system doesn’t mean it’s immune to U.S. law. Crypto companies, like all American entities, are currently prohibited from engaging with Russian SDNs. It’s illegal for U.S. persons to transact with SDNs, period. It doesn’t matter if they use dollars, gold, seashells or bitcoin.

Second, although crypto has grown quickly in the last few years, crypto markets are still too small and transparent to be useful for the Russian economy. Crypto markets are relatively illiquid to start with, and ruble trading pairs are rare. To make a meaningful difference, Russian SDNs would have to convert billions of dollars worth of rubles into crypto. With Russia cut off from the world’s crypto industry, they can’t source nearly enough liquidity for that.

Third, Russian SDNs can’t hide their tracks with crypto. The transparency of public ledgers and the analytics capabilities of U.S. forensics firms render crypto useless for sanctions evasion; if Russia tried, the U.S. government would see and be able to trace their funds in real-time. More, the Treasury Department itself knows there isn’t a real risk of Russia using crypto to subvert sanctions.

Finally, the Russian government has shown no interest in trying to use crypto to evade sanctions. Russia has no crypto holdings and no crypto infrastructure. Instead, Russia has attempted to mitigate sanctions by diversifying its reserves into yuan and gold, and by replacing SWIFT with its own interbank messaging system, SPFS. Despite reports speculating about capabilities such as the digital ruble — which does not exist — the reality is that crypto has not been, and will not be, any help to Russian SDNs.

All this isn’t to say that crypto has no role in this crisis – in fact, crypto is actively helping the  Ukrainian war effort. As Forbes reports, Ukraine has raised over $50 million in crypto donations for security and humanitarian aid since the Russian invasion. Given the devastation that sanctions have already wrought on the Russian economy, it’s clear that crypto is doing far more good than ill.

There’s still a lot of misunderstanding about crypto out there, and in times of crisis, it’s understandable why some may not trust this complex, next-generation technology. But as the crypto industry rapidly becomes a major player in global finance, we encourage Congress to engage with our industry. If they do, they’ll see thriving American companies that play by the rules and respect international law and human rights.

Related Posts

U.S. oil exports surge, drawing crude away from storage hub
Economy

U.S. oil exports surge, drawing crude away from storage hub

March 28, 2022
Russian Prime Minister, Economy Ministry Support Legalization of Cryptocurrencies
Economy

Russian Prime Minister, Economy Ministry Support Legalization of Cryptocurrencies

March 27, 2022
  • Trending
  • Comments
  • Latest
Understanding the Difference Between an IRA Transfer and a Rollover

Understanding the Difference Between an IRA Transfer and a Rollover

July 13, 2020
Analysis paralysis in the investment business

Analysis paralysis in the investment business

September 17, 2020
Features of Best Savings Accounts

Features of Best Savings Accounts

November 30, 2020
What Does My Normal E-Mini Trading Day Look Like?

What Does My Normal E-Mini Trading Day Look Like?

May 9, 2020
Importance of Wills and Chance to Dispute the Wills

Importance of Wills and Chance to Dispute the Wills

0
Third World Challenges in Accounting

Third World Challenges in Accounting

0
Normal Mistakes When Hiring a Tax Accountant

Normal Mistakes When Hiring a Tax Accountant

0
The most effective method to Become A Chartered Accountant

The most effective method to Become A Chartered Accountant

0
Importance of Wills and Chance to Dispute the Wills

Importance of Wills and Chance to Dispute the Wills

May 13, 2022
Why Opt For Slick Cash Loans?

Why Opt For Slick Cash Loans?

May 13, 2022
Everything To Know About Payday Loans By Slick Cash Loan

Everything To Know About Payday Loans By Slick Cash Loan

April 30, 2022
Financial Crisis Solved By Many Like Slick Cash Loan

Financial Crisis Solved By Many Like Slick Cash Loan

April 27, 2022
Finance

Importance of Wills and Chance to Dispute the Wills

When some people find that they are running out of time, they can prepare a will for the family. The ...

May 13, 2022
Finance

Why Opt For Slick Cash Loans?

There are no credit checks for people who need money urgently from Slick Cash Loans, and it is a company ...

May 13, 2022
Finance

Everything To Know About Payday Loans By Slick Cash Loan

It is indeed one of the biggest markets when it comes to loans. There are different types of loans available, ...

April 30, 2022
Finance

Financial Crisis Solved By Many Like Slick Cash Loan

Do you have a bad credit score? Is it difficult for you to get a loan? No one is alone ...

April 27, 2022
News

Why You Should Use Cutco Cutlery In Your Home: Read More about Cutco

Do you ever wonder why you see so many celebrities and social media influencers alike using cutco cutlery in their ...

April 21, 2022

Recent Posts

  • Importance of Wills and Chance to Dispute the Wills May 13, 2022
  • Why Opt For Slick Cash Loans? May 11, 2022
  • Everything To Know About Payday Loans By Slick Cash Loan April 29, 2022
  • Financial Crisis Solved By Many Like Slick Cash Loan April 27, 2022
  • Why You Should Use Cutco Cutlery In Your Home: Read More about Cutco April 21, 2022
  • The Times Of Urgency And Low Credit Score: Slick Cash Loan In Rescue April 21, 2022

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • November 2019
  • October 2019
  • US Markets
  • World Stock Market
  • Cryptocurrency
  • Economy

© 2020 Bleu Finance- All Rights Reserved.

No Result
View All Result
  • Home
  • Let us help

© 2020 Bleu Finance- All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In