Due to the war being waged in Ukraine by Russia, the Russian economy, alongside its currency, have dipped to new lows due to the various sanctions imposed upon it.
Washington is attempting to figure out new ways through which it can pile the pressure onto Russian President Vladimir Putin by proposing sanctions that target cryptocurrencies including Bitcoin (BTC) and Ethereum (ETH).
Pushing the Sanctions Further
The Department of Justice made an announcement detailing the formation of a new task force designed specifically to enforce sanctions.
The task force will target efforts made to use cryptocurrencies to evade U.S. sanctions, launder the proceeds of foreign corruption, and evade the U.S. responses to Russian military aggression.
There is a rising concern that the Kremlin, as well as other ancillary actors that support the offensive in Ukraine, will evade the sanctions regime through digital tokens, which are not owned or issued by a central authority such as those of a bank.
Bitcoin, alongside other cryptocurrencies, is decentralized and borderless, which means that it is not accountable to national boundaries.
The U.S. has placed new debt and equity restrictions on some of Russia’s most critical state-owned enterprises, with estimated assets of nearly $1.4 trillion.
That said, as it stands, Russians are also paying as much as $20,000 above the market rate to buy Bitcoin amid the crisis.
On the Flipside
- Even if Russia were to attempt to use crypto as a means of evading sanctions, its economy is much larger than the emerging crypto market, which means that substantial transactions would likely be flagged.
Why You Should Care
Because there is no central authority through which to block transactions, digital currencies are also considered to be censorship-resistant, and while The Department of Justice may attempt to sanction key transactions, there will always be workarounds in a decentralized market such as cryptocurrency.