Analysts Warn of Regulatory Risks if Russia Is Able to Use Crypto to Evade Sanctions – Regulation Bitcoin News

If cryptocurrency is removed from SWIFT, Russia may turn to crypto. Analysts have warned that if Russia is able to use crypto to evade sanctions, “political support in the U.S. for crypto will fall and regulatory risk will rise.”

If Russia uses crypto to avoid sanctions, Crypto faces regulatory risks

Some analysts warn that Russian President Vladimir Putin may use cryptocurrency to avoid sanctions, as there is increasing talk about banning Russia from SWIFT’s global interbank payment system.

“We believe Washington is worried that Russia will use crypto to evade sanctions,” Cowen Washington Research Group analyst Jaret Seiberg reportedly said Friday. He said:

If Russia uses crypto like this, we think political support will plummet in the U.S. and regulator risk will rise.

Seiberg thinks that Russia could find it difficult to use crypto in order to avoid SWIFT because most international trade is still dollars-denominated.

“Paying in bitcoin requires a conversion to dollars, which provides a way to track activity … That also works in favor of crypto,” he said.

However, analysts think that if Russia can’t use crypto to avoid sanctions, it might increase the viability and legitimacy of cryptocurrency in the eyes regulators.

Seiberg said that the political support for crypto will grow if crypto-exchanges uphold U.S. sanction and if governments can track evasions via blockchains.

Noting that “For crypto, this could be the crisis that determines how the government treats its use for payments and as a store of value,” the Cowen analyst warned:

Pressure would be on the trading platforms and wallets … This would not just be in the United States. This would be true in both the U.K., EU, and the west allies of Asia.

Two Russian cryptocurrency exchanges were sanctioned by the U.S. Department of the Treasury last year. Chatex, Suex, and Chatex were found guilty of processing ransomware-related transactions and other illegal activities.

A report by the Treasury Department last year identified cryptocurrency as a threat to sanction programs. “We are mindful of the risk that, if left unchecked, these digital assets and payments systems could harm the efficacy of our sanctions,” the Treasury Department explained.

Are you concerned that Russia might use crypto to avoid SWIFT or other sanctions? Please comment below.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. He is interested in Bitcoin security and open-source software, network effects, and the intersection of cryptography and economics.