If the President Joe Biden administration gets its way, the latest economic sanction against Russia for invading Ukraine will be a disruption of its cryptocurrency sector, The Wall Street Journal (WSJ) reported.
An administrative official said per the report that any sanctions on Russia’s crypto activity must be developed in a way that does not destroy the global crypto market. But such a task could be challenging.
While crypto has become popular worldwide, the currencies comprise a bigger stake of Russia’s financial system than most countries because of suspicions of its banking network, according to the report. If Biden and Congress are successful, taking aim at bitcoin and ether would put sanctions into unfamiliar territory.
Given that digital currencies are private and exist without borders, mostly outside of government-regulated financial systems, blocking transactions will pose trials.
Ari Redbord, a former senior U.S. Treasury Department official who heads legal and government affairs at TRM Labs, a San Francisco-based blockchain intelligence company, told WSJ that the Office of Foreign Assets Control (OFAC), the law enforcement arm of the Treasury Department, will investigate digital currency platforms that violate bans against transactions with banned Russian banks such as VTB and Sberbank.
“OFAC could also go after larger Russian exchanges the same way it has already designated traditional Russian financial institutions,” Redbord said, per the report.
Last week, United Kingdom Prime Minister Boris Johnson pushed to remove Russia from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) international payments system, which would severely limit the ability of Russia to trade outside the nation.
Read more: UK PM Boris Johnson Wants Russia Booted From SWIFT
Dmytro Kuleba, Ukraine’s minister of foreign affairs, tweeted Thursday (Feb. 24): “Everyone who now doubts whether Russia should be banned from SWIFT has to understand that the blood of innocent Ukrainian men, women and children will be on their hands too.”
I will not be diplomatic on this. Everyone who now doubts whether Russia should be banned from SWIFT has to understand that the blood of innocent Ukrainian men, women and children will be on their hands too. BAN RUSSIA FROM SWIFT.
— Dmytro Kuleba (@DmytroKuleba) February 24, 2022
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