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Though Crypto is a volatile asset, the Russia-Ukraine war is leveraging it in many ways
The crypto concept has invited criticism of many an expert because of the volatility and potential it holds for fraudulent transactions. In response to geopolitical developments, there have been efforts to prevent money flow into the Russian economy. World leaders have responded quite positively towards isolating Russia so much as it has to depend on cryptocurrency. Russia is facing widespread sanctions from countries like European Union, the UK, and the US. They are targeting the Russian financial system and oligarchs, by freezing their assets which directly impact Kremlin’s interests. However, according to experts, Russia can easily evade sanctions, if crypto is adopted as the currency of the transaction.
The European Union, with its new measures, wants to ensure that Russia is unable to use virtual currencies. All the 27 countries of the EU have tightened enforcement of financial sanctions with penalties imposed on the Russian government. According to experts, ensuring compliance would be the harder part of sanctions as other countries are into developing a wide range of cryptocurrencies. The crypto market is rife with speculation about whether Russia will put crypto to full use to avoid sanction, particularly in face of pressure mounting on crypto exchanges to address fraudulent incidents.
Public Blockchain to Check Russia’s Crypto Tactics
According to several reports, the European Union is undertaking several measures to make sure that cryptocurrency exchanges and the Russian economy comply with the sanction regulations. Binance, the world’s largest cryptocurrency exchange will be taking the necessary steps against those who have sanctions levied against them. However, the exchange will not ban general Russian crypto investors, since it might go against the spirit of crypto, which has long been considered as a means of financial property opposing censorship that banks and governments are generally based on. But to oppose the attacks, key Russian figures and financial institutions have been placed on the US’s sanction lists that also effectively prohibit American firms from doing business with them.
The fact that Russia can use cryptocurrencies to evade taxes has ensued a particularly heated debate regarding the role of Bitcoin in this entire phenomenon. This is due to the fact that Bitcoin and other digital currencies are often decentralized. But inculcating a new, transparent, and immutable nature of public blockchains would indicate that exchange owners need to collect detailed information to ensure that Russian heavy-weights carry out the required sanction requirements while maintaining regulations of the crypto ecosystem. While sanctioning governments are unaware of the true identity of the addresses sending the cryptos, exchanges are being instructed to flag any suspicious addresses, the funds of which should be monitored.
Since, Russia’s Ukraine invasion, approximately US$19 million has been donated to Ukraine in the form of cryptocurrencies to boost the functionalities of the country’s military efforts and volunteer groups. Global organizations have taken several initiatives to make sure that Russia weakens in terms of economy and helps Ukraine come out of this devastating state of affairs.