Not Easier For Russians To Avoid Financial Sanctions and Ban Bitcoin Than Ever Before

Russia face new problems according to New York (CNN Business) News story the first wave of Western financial sanctions against Russia did not stop President Vladimir Putin from starting a large-scale invasion of Ukraine. The United States has now begun repression with a new round of sanctions to tighten billions of Russian bank bonds due Russia Ukraine War.

However, some experts say that these practices, which until now have not focused on Putin himself, are becoming easier to avoid, not least thanks to the growing adoption of cryptocurrencies in Russia.US and EU sanctions rely heavily on enforcement by banks. If a company or an authorized person wishes to trade in traditional currencies such as dollars or euros, it is the responsibility of the bank. The flag and blocks have been replaced.

But currencies are handled outside of a country with a global financial situation, transactions are recorded in a public announcement, this is called a blockchain. According to a report by Ross S. Dalston, an expert on money laundering, the Russians will decide and I am sure they have already done so to avoid currencies other than cryptocurrency, they can avoid almost all sanctions observed.

In an October report, officials warned that digital currency could reduce the effectiveness of U.S. sanctions, allowing criminals to withhold and transfer money outside of traditional financial systems. We are aware of the risk that, if left unchecked, these digital assets and payment systems could affect the effectiveness of our judgments.

Like Appendix A, look no further than Eastern Europe, which has one of the highest rates of total criminal crypto transactions, according to a study by Chainalysis. Websites used for regulated transactions, called darknet markets, grossed a record $ 1.7 billion by 2020, mostly in bitcoin and almost all of the black-market growth this year can be attributed to a single Russian-speaking market called Hydra. Hydra is the largest market in the world, with over 75% of global market revenue by 2020, Chainalysis wrote in a report earlier this month.

Of course, avoiding penalties is not as simple as putting all your dollars into Bitcoin. It's hard to buy anything in cryptocurrencies, especially the big ones, Delston said.Take, for example, the food that was brought into the history of Russia.Would a grocery store anywhere in the world accept a currency that changes daily, or would they like the money? World Heritage, US dollars

Another setback: oil trade, which accounts for a large part of the Russian economy, is tied to the US dollar. To use cryptocurrency to buy anything, you must have a token in the currency issued by the government, just like in history, Delston said.that this is not ideal for Russian oligarchs as Bitcoin and other cryptocurrencies can be tracked on the blockchain. Clearing these funds is more difficult, though not impossible, due to blockchain.

There are other ways in which Russia can, in theory at least, ease the severity of the sanctions by removing one page from the Iranian textbook.Like Russia, Iran is an oil exporter and has been under-represented in the size of the American economy for many years, incl. ban on all imports and exports, sanctions on Iranian financial institutions.

But even as a pariah state, Iran knows how to seize some of the sanctions by using bitcoin mining, according to a report by analyst firm Elliptic.Iran has a surplus of energy that cannot be exported, so it is used to stimulate bitcoin mining which destroys a lot of electricity but rewards miners by paying in bitcoin.

The mining process effectively converts energy into cryptocurrency, writes Tom Robinson, founder of Elliptic. Iranian miners pay directly to Bitcoin, which can be used to pay for imports, says Elliptic, which has become official policy in Iran. Elliptic estimates that Iran's miners account for 4.5% of all bitcoin mining, which will translate into annual revenues of almost $ 1 billion.