The European Union is attempting to ensure crypto is included amongst the 27-nation bloc’s packages of sanctions on Russia and its oligarchs, says the French Finance Minister Bruno le Maire during a press conference.
Major exchanges already agreed to freeze accounts of those sactioned, but refused to follow Ukraine’s Vice Prime Minister Mykhailo Fedorov’s call to ban the accounts of all Russian and Belarusian clients. Several politicians like Hillary Clinton have opposed and slammed at the exchanges’ decision.
Many politicians, people of influence, authorities like The U.S. Department of the Treasury, and so forth, have focused on sharing a narrative that portrays crypto in a bad light amidst the Russo-Ukrainian war, but several of their arguments have been found to be misleading.
Bruno le Maire said on Wednesday that the European Union is “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.”
Several users still wonder how come the EU has the power to ensure these masures if “crypto is decentralized”: Exchanges are not and they must comply. However, P2P trading tells a different story.
Just like the U.S., the EU is not currently looking to force exchanges to ban all Russian users as many politicians have asked. But the “crypto offers Russia a pathway to bypass sanctions” narrative has been giving a misleading and refutable image to the public.
“The increase in value of some of these assets maybe a response to attempts to circumvent the sanctions. We are looking into this, but no decision has been taken,” said le Maire.
Why Politicians Whine
Times of war can serve as a mask for governments and politicians to sell misleading narratives and manipulate the masses in their favor.
Historically, the ones in power have excused human rights violations and authoritarian moves by making people believe it is all for their own good. By painting black and white pictures, they have offered freedom while merely dosing an idea of it and never delivering.
“some philosophy of libertarianism or whatever.” -Hillary Clinton
Financial freedom is not convenient for monopolies and supremacies. They need control, monitoring, the possibility to freeze funds at all times so dissidents have to bow.
In moments like these, of course, sanctions can become the only –or the most peaceful– way the world has found to avoid global war and protect humanity from a large threat.
But is it just about war?
Crypto, bitcoin, was born out of mistrust for governments and the banking system. To many users, its ethos may be put in danger if authorities have a way to make crypto platforms comply with all of their wishes.
Changpeng Zhao, chief executive of Binance, told Bloomberg TV that it’s not the exchange’s decision to make to freeze user accounts.
“From an ethical point of view, many Russians do not support this war. So I think we should separate the politicians to the normal people.”
Zhao made a fair point stating that money laundering and the evasion of sanctions “is not a crypto-specific issue,” and added that “the essential things apply to banks and crypto at the same time. We’re following the same rules.”
Although exchanges have taken strong stances and cannot be legally forced to comply beyond their decisions, their centralized model might step into a future where the “financial freedom for all” they have offered might be compromised.
Refuting The Anti-Crypto Argument
The general manager of RippleNet Asheesh Birla made a counterargument about why it may not be as easy as assumed for Russia to evade strict sanctions by using crypto.
The expert pointed out that, first, “crypto is only becoming more easily trackable by software and governments,” second “there simply isn’t enough global liquidity to support Russia’s needs (the country’s FX needs, not individuals)”, and also “on/off ramps are by and large regulated financial institutions that have to abide by OFAC laws.”
Birla claimed that the RippleNet team verified a statement made by the U.S. treasury department: “Russia conducts nearly $50B in FX transactions a day.” Being that bitcoin’s volume is usually between about $20B and $50B a day, Russian politicians’ needs would encompass BTC and more, said Birla.
He also pointed out that “the total average daily volume over the last month for BTC/RUB has been just $11M,” a number that is not nearly enough for the Russian regime to support their crumbling economy.