Treasury Department Targets Crypto Used to Bypass Russian Sanctions
The U.S. is forbidding Americans from using cryptocurrencies to circumnavigate financial sanctions placed on Russia as it seeks to further choke off financial support for the country's wealthy oligarchs.
The Treasury Department regulations specifically prevent U.S. persons from using cryptocurrencies to circumnavigate Washington’s sanctions placed on Russia.The rules published yesterday take effect today, and are part of a broader effort to bolster economic sanctions aimed at Moscow for its invasion of Ukraine.
The U.S. has also placed sanctions on Russia’s central bank and other state-owned and commercial financial institutions. Under the Biden Administration’s latest measures, Americans are effectively prohibited from conducting transactions with Russia’s central bank, with its assets frozen in the United States. Moscow also faces financial pressure from the U.S. and its allies agreeing to limit Russia’s access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global payments messaging system.
Russian financial institutions accounted for 1.5% of SWIFT transactions in 2020, with around $800 billion in annual fund transfers.
U.S. officials have also urged prominent global cryptocurrency exchanges to block sanctioned individuals from accessing their digital assets regardless of location. The move coincides with Ukraine's Ministry of Digital Transformation officially requesting that eight cryptocurrency exchanges block Russian users from their platforms amid concerns digital currencies are being used to evade tightening sanctions.
Coinbase, the largest U.S. crypto exchange, responded by saying it doesn’t have plans to impose a blanket ban on Russian customers but will block trading activity
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