Will Russians Use Crypto to Bust Sanctions?
It wouldn't be easy, but governments can and should make it even harder.
You can’t run this economy on crypto.
Photographer: Dmitry Serebryakov/AFP/Getty Images
The financial strictures imposed on Russia have put a spotlight on cryptocurrencies. Could the Russian government, or sanctioned officials, use digital assets to hide and move their wealth, undermining efforts to punish President Vladimir Putin’s regime for its bloody war in Ukraine?
Here’s where things stand: Global illicit crypto activity amounted to $14 billion in 2021 — or about 0.015% of global gross domestic product — according to analytics firm Chainalysis. Russia’s exports amounted to more than $500 billion in 2021, a volume of transactions that far exceeds what even the largest and most liquid cryptocurrencies, such as Bitcoin, can handle. Also, activity on most blockchains leaves a permanent public record. Any significant state-driven sanctions-busting would immediately stand out, alerting authorities and threatening undesirable consequences for all involved.