EU Monitor Crypto Exchanges To Ensure Russian Sanctions Implementation

EU is working to ensure that digital assets should not bypass sanctions imposed by the alliance opposing Russia, Brune Le Maire, prime minister of France, told on Wednesday, March 02, 2022.

An alliance of twenty-seven countries imposed strict sanctions on Russia because it attacked Ukraine. The sanctions comprise freezing assets owned by the Central Bank of Russia and removal of seven banks of Russia from the list of SWIFT financial messaging systems. 

After meeting with EU finance ministers, Le Maire attended a news conference and said; 

We are taking measures, in particular on cryptocurrencies or crypto assets which should not be used to circumvent the financial sanctions decided upon by the 27 EU countries

He briefed that sanctions imposed on Russia proved productive, have mudded the whole financial structure of Russia, and disabled the power of the Russian Central Bank to defend the Ruble.

The debate started when lawmakers in the United Kingdom and the United States highlighted that digital assets transactions might lead Russia to cross-border money transactions. Moreover, it could surely sabotage the efforts of 27 countries’ bloc for isolating Russia from the international financial market. 

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A large number of imminent cryptocurrency exchanges together with offshore placed entities promised to implement the imposed sanctions. Still, it raised a little resistance for a blanket ban on trading with Russia. Some crypto exchanges uttered that strict sanctions would distress the familiar people of Russia, and this seems to be opposite to the essential vision of cryptocurrencies ‘founding libertarian ideology’.

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On Wednesday, March 02, 2022, the Binance chief executive, Changpeng Zhao, informed BBC: 

If people want to avoid sanctions, there are always multiple methods,” You can do it using cash, using diamonds, using gold. I don’t think crypto is anything special.

EU President Central Bank Proposal To Legalize Crypto Exchanges

The people attending the meeting informed that Christine Lagarde, President of the European Central Bank,  proposed legalizing and bounding crypto exchanges to not deal with Russian clients. The primary purpose is to make sure the misuse of crypto assets against sanctions and apply the decision for removing seven banks of Russia from SWIFT.  

Paolo Gentiloni, European Union economic regulator, highlighted that administrative authorities recognized an increased usage of cryptocurrencies. As a result, it could be a way to avoid sanctions to stop Russian assets. 

The United States Democrats group wrote their concerns to Janet Yallen (Treasury secretary), people could utilize cryptocurrency to elude sanctions. 

The United States Treasury refused to talk about the letter; however, the United States Treasury administrators acknowledged that Russia and its citizens could not easily use cryptocurrencies to elude sanctions.

The administrators said;

 You can’t run a G20 economy on crypto. Big banks in an economy need real liquidity, and conducting large transactions in virtual currency is likely to be slow and expensive.

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