When the US prohibited its citizens from conducting business with Russian banks, gas and oil developers, and other firms in 2014, after the nation invaded Crimea, the hit to Russia’s economy was immense and swift. Economists calculated that sanctions imposed by Western nations cost Russia around $50 billion per year.
Since that day, the global market for crypto and other digital assets has soared. That is good news for Russia and bad news for enforces to sanctions.
On Tuesday, the Biden administration approved fresh sanctions on Russia over the conflict in Ukraine, aiming to prevent its access to foreign capital. According to experts, Russian entities are getting ready to blunt some of the worst effects by making deals with anyone worldwide willing to work with them. And, they said, those entities can then use digital currencies to bypass the control points that governments depend on – mainly transfers of money by banks – to prohibit deal execution.
A former federal prosecutor who now heads the anti-money laundering and sanctions practice at Washington, D.C., law firm Ferrari & Associates, Michael Parker said Russia has had a lot of time to think about this particular consequence. He added that it would be naïve to think that they haven’t gamed out exactly that situation.