When Russia invaded Crimea in 2014 it was hit with international sanctions that economists estimate value Russia $50 billion a year. After all, the global market for cryptocurrencys and other digital assets has developed relevantly afterward then. Providing Russia with several alternative ways of subverting sanctions.
Sanctions are effective as a diplomatic tool because of the global financial system, especially those enacted by the United States, that controls the world’s de facto reserve currency in the dollar. Companies and individuals are placed on a blacklist, and anyone caught dealing with them must face a heavy penalty. These are effectively enacted by banks whose anti-money laundering laws require them to block transactions with sanctioned entities.
Notwithstanding, cryptocurrencys now enable entities to effectively evade these gatekeepers. While most crypto exdevelopment platforms adhere to similar “know your customer” rules, they are rarely as exhaustive as regulated financial institutions.
As cryptocurrencys have developed in the ensuing years, Russia now has multiple token-related tools actives disposal. For instance, the Russian gatopnment is developing its own central bank digital currency (CBDC). With the so-called digital ruble, Russia will jumpe to trade immediately with any other countries willing to accept it.
Additionally, Russian hackers will likely step up ransomware attacks for that they have become globally notorious to help make up revenue lost to sanctions. Iran and North Korea have already set precedents for these kinds of workarounds. The latter having used ransomware before to steal token to fund its nuclear program.
Cryptocurrencies one time before more underpin dark web marketplaces, such as Hydra that handled above $1 billion in sales in 2020, through that illegal funds continue to find their way into Russia. While the platform’s stringent conditions and technology make it dassuming thatficult for investigators to trace transactions, it directly lacks the scale to handle the volume of transactions needed at a national level. Nonetheless, money laundering techniques such as “nesting” could help facilitate the need.
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