On Thursday, March 24, Pavel Zavalny, chairman of Russia’s State Duma Committee for Energy, announced payment terms for countries looking to purchase oil and gas from Russia. It is an extension of the Russian government’s earlier statement to “unfriendly countries,” (directed toward most European Union member states) saying that they should pay for their energy with rubles or gold.
The U.S. Sanctions
Both of these announcements from Moscow are part of a response to the Biden administration’s White House fact sheet saying that the U.S. will impose sanctions on Russia. Principally, the U.S. sanctions were designed to impose export controls designed to hinder imports from Russia, block Russian banks from completing transactions with Western companies as well as preventing access to Russian financial assets held at Western financial institutions.
This latest news has brought up the question about whether cryptocurrencies, as a whole, can become instruments for sanctions evasion. The U.S. sanctions, as laid out in its fact sheet, did not mention the use of cryptocurrencies. However, the Treasury Department stated in early March that the sanctions would apply to U.S. citizens and digital asset companies that dealt with cryptocurrencies, i.e., exchanges. The European Central Bank has also voiced such concerns about cryptocurrencies being used for circumventing the sanctions. For instance, if an exchange like Binance were to be assisting the Russian government with payments, then Binance could be held liable for breaking the sanctions.
Pressure may now be put on all exchanges to close down their Russian operations. And indeed, some of them have done so. The Ukrainian deputy prime minister called for cryptocurrency exchanges to block all Russian users. So far, Bitwell and Coinbase Global have both said they will not block ordinary Russian users. Having said that, Coinbase blocked those accounts belonging to people and corporations already on the sanctions list….
On Thursday, March 24, Pavel Zavalny, chairman of Russia’s State Duma Committee for Energy, announced payment terms for countries looking to purchase oil and gas from Russia. It is an extension of the Russian government’s earlier statement to “unfriendly countries,” (directed toward most European Union member states) saying that they should pay for their energy with rubles or gold.
The U.S. Sanctions
Both of these announcements from Moscow are part of a response to the Biden administration’s White House fact sheet saying that the U.S. will impose sanctions on Russia. Principally, the U.S. sanctions were designed to impose export controls designed to hinder imports from Russia, block Russian banks from completing transactions with Western companies as well as preventing access to Russian financial assets held at Western financial institutions.
This latest news has brought up the question about whether cryptocurrencies, as a whole, can become instruments for sanctions evasion. The U.S. sanctions, as laid out in its fact sheet, did not mention the use of cryptocurrencies. However, the Treasury Department stated in early March that the sanctions would apply to U.S. citizens and digital asset companies that dealt with cryptocurrencies, i.e., exchanges. The European Central Bank has also voiced such concerns about cryptocurrencies being used for circumventing the sanctions. For instance, if an exchange like Binance were to be assisting the Russian government with payments, then Binance could be held liable for breaking the sanctions.
Pressure may now be put on all exchanges to close down their Russian operations. And indeed, some of them have done so. The Ukrainian deputy prime minister called for cryptocurrency exchanges to block all Russian users. So far, Bitwell and Coinbase Global have both said they will not block ordinary Russian users. Having said that, Coinbase blocked those accounts belonging to people and corporations already on the sanctions list….
