Authorities in the United States are confident that Russia may dodge sanctions by using cryptocurrency.
Anyone attempting to assist Russia in circumventing economic sanctions will face consequences from the US government, according to Deputy US Treasury Secretary Wally Adeyemo.
This follows the harsh sanctions placed on Russia by the US and its allies in response to its invasion of Ukraine.
The Treasury Department urges anybody against assisting Russia in circumventing sanctions.
Since the fighting began on February 24, it has triggered a catastrophic humanitarian disaster in Eastern Europe, displacing millions and killing thousands. Russia’s economy has also been weakened by the harsh sanctions, which have increased the country’s isolation.
Adeyemo claimed on CNBC’s Street Signs Europe that there is no proof that Russia has evaded the sanctions. However, he said that the US is aware that they are doing this and would use every available measures to escape the penalties.
Adeyemo singled out opaque shell firms and cryptocurrency as possible means for Russia to circumvent the sanctions.
“What we want to emphasise to cryptocurrency exchanges, financial institutions, people, and anybody else who may be in a position to assist Russia in exploiting and evading our sanctions is that we will hold you responsible,” he added.
He added, in what seems to be a veiled warning to anybody attempting to assist Russia, that the US would guarantee that
“Russia does not have the capacity to circumvent the sanctions that we have imposed to make it more difficult for them to conduct the unlawful war in Ukraine.”
His particular reference to cryptocurrency is unsurprising, considering the big powers’ increased concentration on digital assets.
The G-7 major economies, which include the United States, the United Kingdom, Canada, Japan, France, Germany, and Italy, have agreed to make it hard for Russia and its allies to dodge sanctions via the use of digital assets.
Russia cannot dodge sanctions by using cryptocurrency
Crypto industry stakeholders have highlighted that a nation like Russia cannot depend on crypto to circumvent economic sanctions.
According to a recent analysis from CryptoSlate, the Vladimir Putin-led Administration is unable to circumvent sanctions by using cryptocurrency.
However, this is not persuasive enough for authorities who feel crypto’s secrecy makes it the ideal weapon for circumventing sanctions.
While concerted efforts have made it hard for Russia to utilise bitcoin, Ukraine has used it to pay its defence. The country has received approximately $65 million in cryptocurrency contributions since the crisis began.
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