The Bank of Russia noted that Russian nationals transacted billion (4.78 trillion rubles) in crypto during 2023. According to an annual report issued by the bank, its investigations found that volume flows equivalent to the number, especially in bitcoin and ether, were attributed to Russian nationals in large exchanges. Bank of Russia Reports High […]
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New EU Sanctions Package Preclude Russians From Owning Crypto Companies
The European Union said Russian nationals from owning or controlling crypto service providers under the bloc’s twelfth package of restrictive measures against the country. According to the EU, diamonds entering its will now have to be traced from “the mine to the finger” and this is set to be done using the blockchain.
New Package Seeks to Combat Sanctions Circumvention
The European Union (EU) announced on Dec. 18 that it had adopted a new package of economic and individual sanctions. The package now bars Russian nationals from owning or controlling crypto service providers. This ban is part of the EU’s attempt to “limit circumvention of the prohibition” on the provision of crypto-related services already imposed.
According to the European Commission (EC), the new sanctions package seeks to fulfil the EU’s key objective of finding “a just and lasting peace, not another frozen conflict.” In the document that answers key questions about the Russian sanctions, the EC insisted that the EU sanctions policy has already had the desired effect on the Russian economy.
Some of the sanctions’ successes claimed by the EC include the massive depreciation of the ruble, the increase in interest rates from 8% to 15% as well as tighter capital controls. However, some EU leaders and critics of the current sanctions regime believe the “growing trade figures for some specific products/countries” may be an indication that Russia is actively attempting or succeeding in circumventing the sanctions.
Greek shipping oligarchs now take mostly Kazakh oil out of Black Sea ports (lhs). They've exited the Baltic (rhs) – selling ships to Putin's "shadow fleet" – as they don't like the G7 cap. Their behavior goes directly against strategic interest of the EU. The EU does nothing… pic.twitter.com/Suiev9pG17
— Robin Brooks (@RobinBrooksIIF) December 20, 2023
Using the Blockchain to Trace Diamonds
Economist Robin Brooks for instance has repeatedly accused the so-called Greek shipping oligarchs of actively working to undermine the G7’s oil price cap policy. In response to the criticism, the EU has introduced a new requirement that compels those in the Russian oil supply chain to share price information for ancillary costs, such as insurance and freight upon request.
Meanwhile, the EU has through the twelfth package of restrictive measures against Russia taken steps to prevent the country’s diamonds from entering the G7 market once the ban takes effect on Jan. 1, 2024. Taking this step means diamonds will now have to be traced from “the mine to the finger” and this is set to be done using the blockchain.
“Hence the traceability system includes a mandatory registration, using so-called ‘digital twins’ of the real diamond in its rough state and issuing a certificate of its origin. The identifying information and certificate will be entered into a blockchain-based ledger,” the document explained.
What are your thoughts on this story? Let us know what you think in the comments section below.
Only 2 % of Russians Ready to Keep All Their Savings in Digital Ruble: Poll
While over half of Russians are willing to put some money into their nation’s digital ruble, only 2% say they would keep all their savings in it. Insufficient information and fear of system failures are among the biggest factors turning people away from the government-issued digital currency.
Nearly a Quarter of Russians Would Store Less Than 0 in State-Issued Digital Ruble
More than half of Russian citizens aged 18 to 65 are ready to keep money in the central bank digital currency (CBDC) issued by the Bank of Russia, a survey among 2,000 people ordered by the Russian SPB Exchange has shown.
According to the results, quoted by the Russian daily Izvestia on Thursday, almost a quarter of the respondents said they would convert between 5,000 and 20,000 regular rubles (approximately –0) to the digital ones.
About 15% of the polled admitted they would transfer no more than 5,000 rubles to the new electronic form of the national fiat. Another 9% would use the digital ruble system for keeping between 20,000 and 50,000 rubles of their personal funds.
Around 2% of the polled are prepared to store 50,000 to 100,000 rubles in the central bank digital currency. For 3%, the amount would exceed 100,000 rubles. Only 2%, however, are ready to keep all their savings in digital rubles.
Most of those who took part in the survey said they would like to start using the CBDC in their daily lives but some are turned away by the lack of sufficient information about the technology (22%) and fear of cybertheft or failure of the system (21%).
Legislation designed to facilitate the introduction of the digital ruble was adopted by both houses of Russian parliament and signed by President Vladimir Putin in July. On Aug. 15, banks participating in the pilot project began testing CBDC operations with real users.
Russia’s monetary authority told Izvestia that it aims to make the digital ruble transactions simple, convenient and cheap for businesses while for citizens they will also be free of charge. The CBDC may enter mass circulation in 2025–2027, the regulator added, noting that initially transfers to the digital ruble wallets will be capped at 300,000 rubles per month (a little over ,000).
Do you expect CBDCs like the digital ruble to be widely used in the future? Share your thoughts on the subject in the comments section below.
Russians Turned to Tether During Wagner Revolt
Russian citizens sought refuge in tether amid the brief mutiny of the Wagner mercenary group that shook their country. The ruble-denominated trading volume of the U.S. dollar-pegged stablecoin spiked during the short-lived rebellion, market data revealed.
Russians Traded Millions of Dollars’ Worth of Tether in a Day of Unrest Triggered by Wagner
Many Russians have apparently tried to find safe haven in crypto when their nation was at the brink of a civil war a few days ago. On Saturday, as a revolt by the Wagner private army unfolded, trades between the Russian fiat and tether (USDT) surged to almost million in value, or close to 1.3 billion rubles, according to blockchain data firm Ccdata.
The volume was up from million on Friday, the Wall Street Journal noted in a report. On the same day, Wagner’s boss, Yevgeny Prigozhin, posted a series of video and audio messages announcing his mercenaries will lead a “march for justice” against Russia’s military leadership, the culmination of a long-time feud with generals in Moscow over the war in Ukraine.
The market data for June 24 is based on trading on crypto exchanges that still support pairs with the Russian currency despite Western sanctions imposed after Russia’s invasion. The largest such platforms include , Hitbtc, Cryptonex, and Coinsbit, Ccdata said, quoted by Bloomberg.
An increase in the trading volume does not directly indicate that ruble users were buying tether, clarified Jamie Sly, who heads communications at Ccdata. However, the spike could be attributed to “market participants looking toward a less volatile asset like USDT versus rubles, as similar trends were not observed for Bitcoin volumes,” Sly elaborated.
Ccdata’s findings were confirmed by a representative of the blockchain data firm Kaiko. The company’s Director of Research, Clara Medalie, highlighted that the ruble-denominated tether trading volume is at its highest since December, 2022.
Citizens of countries experiencing political and economic troubles have often sought refuge in cryptocurrencies during crises. Demand for tether in Turkey, for example, has been high since May amid record inflation of the Turkish lira, a report revealed earlier in June.
Right after Russian forces invaded Ukraine in late February, last year, major cryptocurrencies like bitcoin (BTC) and ethereum (ETH), alongside USDT, traded at premiums against the Ukrainian hryvnia following the decision of the country’s central bank to impose restrictions on cash withdrawals.
What do you think about cryptocurrencies and stablecoins providing safe haven in times of crisis? Share your thoughts on the subject in the comments section below.
Two Russians Charged for Infiltrating Mt Gox and Operating Illicit Crypto Exchange, BTC-e
In a statement issued on Friday, the U.S. Department of Justice (DOJ) revealed that two Russian individuals have been accused of infiltrating a cryptocurrency exchange and running an unlawful exchange. Reportedly, the pair gained unauthorized access to Mt Gox’s servers from 2011 to 2014 and purportedly pilfered 647,000 bitcoins from the now-dissolved exchange.
Russian Duo Accused of Orchestrating Mt Gox Heist and Operating Underground Crypto Exchange
The U.S. government has charged two Russians for breaching Mt Gox and managing the former crypto exchange BTC-e. The defendants, Alexey Bilyuchenko and Aleksandr Verner, are believed by authorities to have collaborated with Alexander Vinnik in running BTC-e.
As stated in the indictment, “As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide,” remarked Kenneth Polite Jr., the assistant attorney general of the Justice Department’s Criminal Division.
A 2016 indictment was unveiled alongside the press release, revealing more details about the relationship between Mt Gox and BTC-e. The indictment alleges that “Bilyuchenko, Verner, and their co-conspirators” initially accessed Mt Gox in September 2011 and managed to siphon funds from its wallets. “From September 2011 through at least May 2014, Bilyuchenko, Verner, and their co-conspirators allegedly caused the theft of at least approximately 647,000 bitcoins from Mt Gox,” asserts the DOJ.
BTC-e, Alexander Vinnik, and Russian nationals have all been implicated in hypotheses surrounding Mt Gox’s demise long ago. In 2019, reports stated that Russian attorney Alexander Zheleznikov from ZP Legal alleged his firm was aware of who the Russian nationals were and tied Mt Gox to the operators of BTC-e. In their latest discovery, the DOJ claims that the pair worked with an unnamed bitcoin brokerage service, referring to it as the “New York Bitcoin Broker” in the indictment.
A fabricated advertising agreement was allegedly concocted between Bilyuchenko, Verner, and the New York Bitcoin Broker to camouflage and liquidate bitcoins taken from Mt Gox. “Bilyuchenko and Verner supposedly made regular requests to the owner and operator of the New York Bitcoin Broker to transfer large sums into various offshore bank accounts, including those under the names of shell corporations managed by Bilyuchenko, Verner, and their co-conspirators,” details the DOJ’s charges and unveiled court indictment.
What do you think about the DOJ’s charges against the two Russian nationals? Share your thoughts and opinions about this subject in the comments section below.
Russians Warned Against Saving in Crypto Amid Declining Savings in Foreign Fiat
A government official in Moscow has advised Russians to avoid cryptocurrencies now when interest in foreign fiat currencies is declining in the country. The high-risk assets are not suitable for the savings of most people and make sense only for investments by rich people, his comments suggest.
Finance Ministry Don’t Want to See Russians Saving in Cryptocurrency
Restrictions imposed by the Russian state on foreign currency accounts and operations amid Western sanctions have led to a decrease in the volume of savings kept in foreign fiats. Against this backdrop, Russians have been warned they shouldn’t switch to cryptocurrencies.
“We would definitely not want citizens’ savings to be directed to digital currencies,” the head of the Financial Policy Department of the Russian Ministry of Finance, Ivan Chebeskov, stated during the blockchain conference “Finance of the Future: Challenges and Opportunities.”
Cryptocurrencies are a high-risk instrument, he pointed out quoted by RBC Crypto, and even stablecoins pegged to traditional currencies are not very suitable for savings purposes as they do not accrue interest, the government official elaborated.
Chebeskov is convinced that regulated digital financial assets (DFAs) could be a better alternative. These are typically tokens issued on a blockchain platform operated by a licensed entity under Russian law. The Bank of Russia expects its market to grow significantly.
The finance ministry representative added that assets such as cryptocurrencies make sense only for wealthier Russians, not for people with average income and savings, and then only for 10 to 15% of the capital available for investment.
Around 13 million people in Russia, approximately 9% of the population, now hold cryptocurrencies, according to Anatoly Popov, deputy chairman of the Board of Sberbank, Russia’s largest bank. Popov, who also spoke at the conference, highlighted that at least 1 million of them are active users.
Do you think the number of Russians saving in crypto will increase despite the government’s warning? Share your thoughts on the subject in the comments section below.
Putin Wants Limit on Currency Purchases for Russians Dealing With Foreigners
Russian citizens and firms doing business abroad may soon be restricted in the amount of foreign currency they are allowed to acquire, on order from Vladimir Putin. Russia’s head of state now wants his government to cap such purchases on the domestic forex market.
President Putin Orders Russian Authorities to Limit Foreign Currency Purchases
Russian President Vladimir Putin has tasked the federal government and the central bank in Moscow to introduce a billion monthly limit on the purchase of foreign currency meant to be used in transactions with entities and individuals in other countries.
According to an announcement by the Kremlin, the restrictions will apply to Russian residents buying other nations’ currencies in the domestic foreign exchange market for transfers abroad within government-approved settlements, the RIA Novosti news agency reported.
The order is part of instructions issued after a meeting on economic matters held on April 11 but published only last week. The measures will affect transactions crediting “accounts opened with banks located outside the territory of the Russian Federation.”
The deadline for imposing the limit has been set at June 1, 2023. Putin also asks the Bank of Russia and the Ministry of Finance to draft a list of cases in which the restriction would not apply.
Russia has been dealing with heavy Western sanctions imposed in response to its invasion of Ukraine in late February 2022, including freezing of its foreign currency reserves abroad and restricting its access to banking and financial services.
To prevent shortages of convertible currencies like the U.S. dollar and the euro as well as flight of capital, Russian authorities introduced foreign currency restrictions last spring and have been considering ways to circumvent the sanctions, including by de-dollarization of international trade and working on SWIFT alternatives.
Moscow has been also taking steps to legalize cross-border crypto payments. In November, Putin himself called for international settlements based on blockchain and digital currencies. In mid-May of this year, the head of the parliamentary Financial Market Committee, Anatoly Aksakov, unveiled that Russian lawmakers are preparing to adopt four bills related to cryptocurrencies by the end of July.
Do you think Russia will introduce more currency restrictions in the future? Tell us in the comments section below.
IRS, Chainalysis Helping Ukraine Track Russians Using Crypto to Evade Sanctions
The U.S. Internal Revenue Service (IRS) said it’s working closely with Ukraine to help it trace crypto transactions of Russian sanctions evaders. The agency is providing the Ukrainians access to a Chainalysis tool as well as specialized training to Ukrainian law enforcement.
IRS Offers Ukraine Tools From Chainalysis to Trace Russian Blockchain Transactions
The criminal investigation division of the United States Internal Revenue Service announced it’s stepping up collaboration with counterparts abroad as part of efforts to identify persons and entities evading Western sanctions.
The agency revealed it’s working with blockchain forensics firm Chainalysis and Ukrainian investigators to track Russians who might be using cryptocurrencies to conceal their assets amid financial restrictions imposed over Moscow’s invasion of Ukraine.
According to a report by Bloomberg, the IRS is sponsoring Ukraine’s access to a Chainalysis tool facilitating crypto-related probes. It has also organized training sessions for the country’s law enforcement, both virtual and in-person, on tracing blockchain transactions.
These efforts are expected to improve information-sharing and case development between the U.S. and Ukraine, the revenue service explained in a statement. Commenting on the cooperation, IRS Criminal Investigation Chief Jim Lee emphasized:
Sharing tools not only safeguards the U.S. financial system, but the global economy.
Authorities around the world have issued warnings that sanctioned countries like the Russian Federation and Iran may be using crypto to bypass international restrictions. Another Bloomberg report recently revealed that the world’s largest crypto exchange, Binance, is facing an investigation by the U.S. Justice Department over suspected violations of Russia sanctions.
According to Michael Gronager, co-founder and chief executive of Chainalysis, crypto is still too illiquid to support mass sanctions evasion but this does happen on a smaller scale. Work to establish how much Russian oligarch money is flowing through Ukraine is continuing, he added.
Gronager also noted that cryptocurrency is playing an unprecedented role in the war through donations in support of both sides. Around million have been transferred this way to approximately 100 pro-Russia groups over the past year, he pointed out as an example. Most crypto assets sent from wallets sponsoring Russia reach centralized exchanges, research showed in March.
Ukraine and the United States have been working together on other crypto-related fronts. Supported by U.S. law enforcement, Ukrainian police disrupted a network of crypto exchange services suspected of laundering criminal proceeds from ransomware attacks and fraud schemes, announcing the shutdown of 9 of such platforms earlier in May.
Do you think the U.S. and Ukraine will further expand their cooperation on tracking Russian crypto transactions? Tell us in the comments section below.
Binance Bans Russians From P2P Transactions With Dollars and Euros
Cryptocurrency exchange Binance has introduced new restrictions for Russian users, in accordance with the latest European sanctions. The platform is restricting access to peer-to-peer (P2P) transactions in U.S. dollars and euros for traders based in the Russian Federation.
Binance Prohibits US Dollar and Euro Transactions for Russians on Its P2P Market
The world’s largest crypto exchange, Binance, is imposing restrictions on P2P transactions in U.S. dollars and euros for Russian traders. They have been introduced in compliance with the 10th round of EU sanctions on Russia announced on the first anniversary of the Ukraine war in late February, its representatives explained in comments for Russian-language crypto media.
The measures mean that Russian citizens, as well as foreign nationals residing in the Russian Federation, will no longer be able to buy and sell the fiat currencies of the United States and the Eurozone through Binance’s P2P service. At the same time, citizens of EU countries will not be allowed to transact in Russian rubles.
To continue using Binance P2P, the affected customers can choose other available fiat currencies, a spokesperson suggested, quoted by Forklog and RBC Crypto. When trying to initiate transactions in dollars or euros, the platform prompts users to select a local currency, in accordance with the Binance rules for the country specified during the verification of their accounts.
Russian crypto enthusiasts turned to peer-to-peer crypto trading when leading payment processors Visa and Mastercard suspended operations in Russia in March 2022 and Western governments imposed restrictions on SWIFT transfers following Moscow’s invasion of Ukraine on Feb. 24.
In April, last year, Binance limited access to its services for Russia-linked users with assets exceeding €10,000, as per a previous package of sanctions adopted by the European Union. Earlier that month, EU member states agreed to ban the provision of “high-value” crypto asset services to Russian businesses and citizens.
The new restrictions for Russians do not apply to purchases and sales of crypto assets with Russian rubles and other digital currencies, including stablecoins pegged to the dollar and the euro. Those who prefer to use fiat will have to either switch to other fiat currencies or use the services of other exchanges.
Amid an ongoing conflict, cryptocurrency exchanges have been helping both Russians and Ukrainians to also circumvent currency restrictions imposed by their own governments. Last week, Binance and Ukraine-based exchange Kuna announced temporary suspensions of payments with bank cards in Ukrainian hryvnia.
Do you expect other crypto exchanges, besides Binance, to introduce similar restrictions for their Russian users? Tell us in the comments section below.
Fraudsters Offer Russians Bogus Chance to Invest in Fake ‘State Cryptocurrency’
Internet users in Russia have been targeted in an email campaign advertising the launch of an alleged cryptocurrency issued by the state. Potential victims are encouraged to follow a link to the website of the fraudulent investment scheme, security experts said.
Thousands of Investment Offers Entice Russians to Put Money Into Non-Existent Cryptocurrency
Fraudsters have been sending emails to Russian residents claiming to be writing on behalf of a regulatory body about the upcoming launch of “the Russian state cryptocurrency,” the Tass news agency reported, quoting Kaspersky Lab.
“With such messages, attackers lure users to resources where they risk losing money,” the cybersecurity firm explained. Several thousands of these letters had been sent by the end of February, the anti-virus provider revealed.
The fraudulent emails claim that Russia is preparing to introduce a state-issued crypto and encourage recipients to follow a link to the website of the investment program for the coin. The site also presents a project purportedly developed by Pavel Durov, the founder of Telegram, the most popular messenger in the crypto community.
The platform offers visitors a bogus chance to invest in the project and earn even more in the future. In reality, the deposits made by the victim go to the scammers. Investors would not get anything back and risk compromising confidential information shared with the website.
The anti-spam systems of Russian tech giant Mail.ru block over 200,000 emails from crypto-linked scams every day, according to the technical director of the group’s business unit. Around 15% of them are disguised as letters allegedly sent on behalf of regulators, Andrey Sumin detailed.
To avoid becoming victim to a fraud like these, experts recommend that users improve their digital literacy in the first place, use a security solution for their smartphone and PC, be careful with email content, and refrain from clicking on links from unknown sources or entering sensitive data on suspicious websites.
The Central Bank of Russia has been working on a project to issue a digital version of the nation fiat currency. The digital ruble will be the third form of Russian money besides cash and electronic bank money. It will be used for payments, not investments.
In February, the monetary authority announced it plans to start testing it with real users and transactions on April 1, aiming for a full launch in 2024. Russia has yet to comprehensively regulate decentralized cryptocurrencies like bitcoin.
Do you know of similar fraudulent schemes? Tell us in the comments section below.