In light of the recent monetary sanctions imposed on Russia, there has been much discussion about the country’s residents and their usage of cryptocurrencies.
Coinbase declared in a blog post on March 7 that it is dedicated to complying with sanctions and, as a result, is developing a multi-layered, worldwide sanctions program. The company, in particular, revealed that it has blocked over 25,000 Russian addresses that they think are linked to Russian individuals or enterprises engaging in criminal activities.
“Today, Coinbase blocks over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own proactive investigations. Once we identified these addresses, we shared them with the government to further support sanctions enforcement.”
The business also underlined that the transactions are public, providing unparalleled insight into transaction data, traceable, and permanent, so once recorded on the blockchain, transactions stay immutable, preventing bad actors from withholding information to evade detection.
Are Russian oligarchs evading sanctions with crypto?
To effectively overcome present sanctions, the Russian government and other sanctioned entities would need vast sums of digital assets that are practically impossible to come by.
Recently, Finbold highlighted three reasons why Russia can’t overcome sanctions by using crypto citing a lack of liquidity, anonymity, and crypto exchanges being subject to anti-money laundering rules.
Coinbase highlighted that over $630 billion in mostly immobilized reserve assets is held by the Russian central bank alone.
“That’s larger than the total market capitalization of all but one digital asset, and 5–10x the total daily traded volume of all digital assets,” the firms said.
Consequently, attempting to conceal large-scale transactions using open and transparent crypto transactions would be significantly more difficult than using other existing techniques.