Since Russia’s invasion of Ukraine began, the concept of imposing sanctions on the country and those in power evading them via the usage of cryptocurrencies has been at the forefront of public discourse.
Jonathan Levin, co-founder and chief strategy officer of Chainalysis, spoke with Bloomberg Technology about the new tools that will aid bitcoin startups and financial institutions in remaining compliant with sanctions.
When it comes to the role of intermediaries such as cryptocurrency exchanges and the necessity to collaborate with lawmakers and regulators, the issue of how much proof there is of Russians possibly circumventing these restrictions was explored.
To follow persons who may be attempting to circumvent penalties, the Chief Strategy Officer highlighted the procedures in place to monitor such cases:
“We’re looking at all of the points of entry and exit from the Russian economy into cryptocurrencies and tracking changes in liquidity, volume, and transaction patterns to determine whether there has been a systemic shift in the way people in Russia are using cryptocurrency and potentially evading sanctions.”
He continued: “So far, we haven’t seen the type of systematic use of bitcoin to dodge sanctions that many were concerned about at the start of this.”
Crypto has proved its use in humanitarian assistance
Meanwhile, the recent global turmoil has been dubbed a tipping moment for cryptocurrencies. The reason for this is that crypto can be used for humanitarian purposes, as evidenced by the speed with which money was transferred from around the world to Ukraine’s government and then used to purchase military equipment and emergency food supplies, effectively funding a portion of the country’s defence.
Simultaneously, this demonstrates how regulators may swiftly band together in an effort to work cohesively against bad actors.
Mr. Levin made the following observation: “It is conceivable for bitcoin enterprises operating on a global scale to comply with sanctions. I believe that the combination of cryptocurrency’s legality and usefulness at the forefront contributes to this heightened emphasis and scrutiny on regulation. An inflection moment in the ability of regulated cryptocurrency enterprises to operate in developed economies.”
Finally, as of March 22 (6:10 UTC), Ukraine’s bitcoin contribution statistics reach more than $90.29 million, according to SlowMist data. The pace of donations seems to have stabilised, which might be attributed to a number of factors.