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Russia is likely to use cryptocurrency to circumvent sanctions

U.S. and European sanctions over the past week and a half have sent the screws to the Russian government and its oligarchs who are likely to use alternative methods to transport their money across borders.

“We believe that Russian companies and nationals are very likely to want to use crypto assets like Bitcoin or the pegged US Dollar stable, for example Heated (USDT), to circumvent the economic sanctions, ”said Josh Olszewicz, head of research at Valkyrie Funds, digital asset investment manager.

Stablecoins are tied to fiat or backed by central banks, while Bitcoin and other non-stablecoin digital currencies derive value from supply and demand and otherwise have no intrinsic value. Non-interchangeable tokens or NFTs are digital tokens attached to assets other than cash, but these “assets” can be as valuable as art and real estate or as insignificant as a random photo or a stuffed animal.

Along with freezing the assets of key Russian oligarchs, Russian and European governments banned Russian banks from using SWIFT, the world’s largest financial messaging network. The sanctions seemed to have almost immediate and far – reaching economic consequences, as billions of dollars were suddenly unavailable to Russian banks.

In addition to cryptocurrencies, even SWIFT’s financial messaging network can be easily manipulated to disguise the money transfers of approved entities, according to Mark Gazit, CEO of ThetaRay, an AI-driven transaction monitoring solution for cross-border payments.

SWIFT is a relatively secure network in its own right, but it’s not difficult to set up shell and money funnel companies through them and then use the financial messaging system to conduct cross – border transactions, Gazit said.

Copyright © 2022 IDG Communications, Inc.

Russia is likely to use cryptocurrency to circumvent sanctions

Source link Russia is likely to use cryptocurrency to circumvent sanctions

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