Switzerland Announces Plans to Freeze Russian Cryptocurrency Assets

This historically neutral nation has not only joined the European Union in condemning Russia; it has now begun targeting Russian cryptocurrency.

According to a Financial Times article published Friday, the Swiss federal government intends to freeze crypto assets held by Russian residents and enterprises inside the country’s borders.

The suspension would correspond with European Union sanctions already in place in reaction to Russia’s invasion of Ukraine.

According to the Financial Times, Swiss Finance Minister Guy Parmelin said Switzerland has blocked the bank accounts and physical assets of 223 Russians in the last week, including close aides of President Vladimir Putin. The cryptocurrency limitations constitute a secondary punishment in addition to the EU penalties.

According to a senior finance ministry official, freezing crypto assets was vital to defend the integrity of Switzerland’s blockchain business. According to research by CV VC, a Swiss venture capital company, around 1,128 blockchain startups were headquartered in Switzerland or nearby principality Liechtenstein as of December 2021.

The European Union unveiled steps on Wednesday to tighten down Russia’s capacity to circumvent economic sanctions via the use of cryptocurrency. “We are taking steps, particularly with regard to cryptocurrencies or crypto assets that should not be used to evade the 27 EU nations’ financial sanctions,” France’s Finance Minister Bruno Le Maire stated.

Calls for cryptocurrency exchanges such as Coinbase and Binance to restrict and block Russian access to cryptocurrencies have highlighted the transnational nature of digital assets. While an exchange may freeze or limit access to crypto, crypto held in cold storage or a self-custodial wallet is more difficult to seize or confiscate—unless its holders attempt to transfer it through restricted channels.

“If someone keeps their crypto key in their possession, it will be practically hard to identify them regardless of where they are,” the official told FT. “However, if they are using crypto services—funds, exchanges, and so on—we may target these service points.”

Also Read: Ukraine Gains An Odd Friend In Its Campaign To Deny Russia Access To Crypto: The Central Bank Of Russia