SANCTIONS & DIGITAL ASSETS

As the U.S., EU, U.K. and other allies around the world impose new sanctions on Russia and Belarus, compliance is more consequential than ever. With digital assets providing an alternative to traditional financial systems, many falsely believe Russia could use cryptocurrencies to evade sanctions on a large scale.

THE FACTS

There currently is not enough liquidity in digital asset markets for Russia to effectively evade sanctions at scale. Transferring digital assets through miscellaneous wallets and exchanges in an attempt to obfuscate or conceal ownership is expensive, time-consuming, and widely visible to the crypto market.

Over the past years, Russia has attempted to sanctions-proof their economy, including diversifying their capital reserves into Chinese Yuan and gold, and shifting their trade to Asia. Digital assets have not played a role in Russia’s sanction evasion strategy.

To enter the traditional banking system, the vast majority of digital assets eventually flow to regulated platforms, who are subject to, and comply with robust anti-money laundering regimes overseen by agencies such as FinCEN. These platforms, similar to traditional financial services, employ effective surveillance and compliance tools to implement sanctions checks and controls. These controls are in place and being undertaken today.  

Unlike traditional finance, blockchain technology enables an additional layer of transparency. Digital asset market participants are able to employ additional blockchain analytics tools to effectively track and trace crypto transactions, identify bad actors and freeze funds.

Money laundering accounted for just 0.05% of all cryptocurrency transaction volume in 2021. For comparison, the UN Office of Drugs and Crime estimates that between $800 billion and $2 trillion of fiat currency is laundered each year —
as much as 5% of global GDP. *

*Chainalysis Crypto Crime Report 2022

SANCTIONS RESOURCES

UKRAINE: THE LATEST GLOBAL SANCTIONS AND EXPORT CONTROLS

The briefing provides an overview of the sanctions and export controls imposed by the US, EU, UK, Japan, Singapore and Australia, as well as measures adopted in response by Russia.

US. government agencies

Ari Redbord and TRM labs were joined by Carole House, Director for Cybersecurity & Secure Digital Innovation for the White House National Security Council (NSC), and Todd Conklin, Counselor to the Deputy Secretary of the U.S. Treasury, to discuss Russia sanctions.

How Virtual Currency Companies Can Raise the Compliance Bar

Cryptocurrency laws and regulations are evolving as fast as the blockchain technology that supports it.

Can cryptocurrencies help Russia evade sanctions?

Chamber member, TRM labs, discusses how it’s unlikely crypto could benefit sanctions evasion.

Russia’s Hidden Tool to Undermine Sanctions

Digital markets have created new ways to subvert penalties, but Treasury officials say they aren’t overly worried.

Enforcing Sanctions

Chamber member, FTXUS, describes how exchanges enforce sanction and remain compliant.

CRYPTO IN UKRAINE

Update on Ukrainian Crypto Donations

TRM investigators have seen a surge in cryptocurrency donation campaigns for Ukraine since the start of the invasion.

Crypto For Ukraine: Powered by Merkle Science

A live dashboard that tracks cryptocurrency donations to various government and non-profit organizations supporting Ukrainian efforts on the ground.

Crypto Allows Ukraine to ‘Operate Internationally,’

Ukraine has been increasingly relying on cryptocurrency donations to solve humanitarian problems and finance its defense efforts.

UKRAINE AND DONATED CRYPTOCURRENCIES

Ukraine spends $15 million in cryptocurrency donations received to purchase military supplies.