“Exchanges that operate with strong processes and codes of conduct will no doubt be doubly watchful at this moment for funds that have nefarious origins,” Charles Hayter, CEO of data firm CryptoCompare, told CNBC.
On Thursday, Brian Armstrong, CEO of cryptocurrency exchange and wallet Coinbase, backed up many of these points in a thread. He said that every U.S. business has to follow the law.
“It doesn’t matter if your company handles dollars, crypto, gold, real estate or even non financial assets. Sanctions laws apply to all US people and businesses,” Armstrong said.
“So it would be a mistake to think crypto businesses like Coinbase won’t follow the law. Of course we will. This is why we screen people who sign up for our services against global watchlists, and block transactions from IP addresses that might belong to sanctioned individuals or entities, just like any other regulated financial services business.”
However, there has been a spike in the volume of transactions from ruble into bitcoin and to tether, a so-called stablecoin tied to the U.S. dollar, since Russia’s attack on Ukraine, according to CryptoCompare. Hayter said this is a “flight to the dollar by any means possible where crypto is but another route to preserve wealth,” as the ruble has plunged.
Coinbase’s Armstrong said “some ordinary Russians are using crypto as a lifeline now that their currency has collapsed.”
Earlier this week, lawmakers including Senator Elizabeth Warren urged the Treasury Department to ensure that they could make sure crypto companies are compliant with sanctions on Russia. One U.S. government official said it’s unlikely that Russia could evade sanctions using cryptocurrencies.
“The scale that the Russian state would need to successfully circumvent all U.S. and partners’ financial sanctions would almost certainly render cryptocurrency as an ineffective primary tool for the state,” said Carol House, the director of cybersecurity for the National Security Council, during a webinar on Wednesday, Reuters reported.
Article source: https://www.cnbc.com/2022/03/04/russia-ukraine-war-cryptocurrencies-and-sanctions-in-the-spotlight-.html