Ongoing access to crypto market in Russia despite sanctions
Russians will continue to have access to crypto markets despite the application of sanctions, according to a senior Russian official.
Impossible to completely block market
That’s the view of Anton Gorelkin, the deputy head of the State Duma committee on information policy. In a report published by Russian state-owned news agency TASS on March 6, Gorelkin is quoted as stating:
"It should be recognized that it is impossible to completely block this market for Russia."
Gorelkin added that crypto remains one of the mechanisms through which international sanctions being applied to Russia can be circumvented. Russian firms have increasingly been using Bitcoin and crypto in international trade to circumvent sanctions.
The Russian official’s comments come as Russian crypto exchange Garantex has been forced to suspend its services. Last month, the Council of the European Union (EU) had added the exchange to its latest Russian sanctions package.
This was part of the EU’s sixteenth sanctions package against Russia since the conflict in Ukraine began. It’s the first time that a crypto exchange has been included within any such sanctions. The EU did so on the assertion that Garantex is “closely associated with EU-sanctioned Russian banks.”
Tether ‘enters war’ against Russian crypto market
The crypto exchange took the decision to suspend its services following an action taken by leading stablecoin issuer, Tether. Taking to Telegram, the exchange stated:
“We have bad news, Tether has entered the war against the Russian crypto market and blocked our wallets worth more than 2.5 billion rubles [$27 million].” The exchange took the opportunity to warn its users that “all USDT in Russian wallets is currently under threat.”
Garantex added that it has been the first to be hit with such a measure, but that it won’t be the last. The firm said that it “will fight, and [it] will not give up.”
Tether has been under the spotlight of regulators and governments globally in recent years. In response, it appears to have incorporated the freezing of funds subject to sanctions more recently, with closer cooperation with law enforcement and government agencies. Last year, the company outlined that it planned to freeze funds held in addresses related to countries or companies subject to sanctions.
Last September, Tether claimed to have played a role in an operation carried out by the Dutch authorities and U.S. Secret Service that led to the takedown of two crypto exchanges, Cryptex and PM2BTC, who were alleged to have been involved in money laundering.
Garantex had already been subject to U.S. sanctions since April 2022. At the time, the U.S. authorities described the exchange as a "ransomware-enabling virtual currency exchange." The firm was originally established in Estonia in 2019.
Commenting on the development, Gorelkin stated:
"To the investors who underestimated this risk, my condolences."
He also asserted that the latest round of sanctions will not be the last in attempts to apply pressure on Russian cryptocurrency firms and crypto sector infrastructure within Russia. While he believes that crypto remains a tool to get around sanctions, he stated that “USDT can be safely deleted from this list.”
