Bloomberg: US Urges Crypto Exchanges to Prevent Russia from Circumventing Sanctions

The White House is holding relevant discussions with operators of the largest cryptocurrency exchanges. According to US officials, Russians who are on the sanctions list may well begin to use cryptocurrencies to circumvent sanctions.

The administration of US President Joe Biden has asked cryptocurrency exchanges to help prevent the use of digital currencies to circumvent sanctions by Russian individuals and organizations. Bloomberg is reporting, citing informed sources.

According to the interlocutors of the agency, the White House National Security Council and the US Department of the Treasury have asked the operators of the world's largest centralized exchanges to stop any attempts to circumvent the restrictions imposed by the US and its partners after Russia's invasion of Ukraine.

In a conversation with Bloomberg, a White House spokesman said that cryptocurrencies are not a replacement for the US dollar, which is widely used in Russia. However, the US authorities intend to fight the misuse of digital assets to circumvent sanctions, he added.

Earlier, the US, EU, UK, and Canada announced their readiness to disconnect some Russian banks from SWIFT, and also limited the ability of the Bank of Russia to conduct operations to support the ruble. The purpose of the measures is to isolate the Russian Federation from the international financial system.

Against the backdrop of these and other sanctions, the quotes of the Russian national currency collapsed. On February 28, after the opening of trading, the Moscow Exchange set the exchange rate ceiling at 90 rubles for the dollar and above 101 rubles for the euro. Later the corridor was expanded.

The fact that Russia can use cryptocurrencies to circumvent sanctions has already been announced by representatives of the EU and Ukraine. European Central Bank President Christine Lagarde has called for increased regulation of digital assets in the euro area for this reason:

“There are criminal ways to circumvent the ban, which is why it is so important that MiCA be passed as quickly as possible. We need a regulatory framework,” Lagarde said at a press conference.

Deputy Prime Minister and Minister of Digital Transformation of Ukraine Mikhail Fedorov also called on "all major crypto exchanges" to freeze user accounts from the Russian Federation and Belarus. According to him, it is “critical” that these are all accounts and not just those “related to politicians.”

The head of the American exchange Kraken, Jess Powell, said that such a decision cannot be made "without a corresponding legal requirement." A Binance spokesperson also said that the company is not going to "unilaterally freeze millions of innocent user accounts."

However, if the regulators put pressure on the trading platforms, the latter may go for account blocking. In a conversation with The Block, Yulia Parkhomenko, a representative of the Ministry of Digital Development of Ukraine, said:

“We plan to put forward legal requirements. We are preparing letters.

Deputy Minister of the Ministry of Digital Development Alexander Bornyakov confirmed to ForkLog that Ukraine will require cryptocurrency exchanges to block the wallets of users from the Russian Federation. According to him, we are talking about all trading platforms and any accounts.

Recall, experts interviewed by The New York Times noted that Russian companies have many tools at their disposal to circumvent sanctions, including the digital ruble and ransomware.

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