As the Russia vs Ukraine war progresses, various financial organisations and governments have pointed out multiple times the possibility of Russia being able to evade the economic sanctions put on them via unscrupulous means mainly one of them being cryptocurrency. As crypto transactions aren’t based on any traditional economic networks, it is hard to track and block.

Recently, the IMF has pointed out and warned again that Russia may be planning to use its vast energy resources to power its crypto mining industry to earn higher revenue from it. This will immensely help it to support its war-stricken economy and also help it to fund the ongoing war massively. Whereas, the global economic sanctions implemented on Russia were intended to cripple its economy so that it would run out of funds to fight the war.

Even the Russian President Vladimir Putin stated in the past that Russia has a “competitive advantage” when it comes to Bitcoin mining. Hence, there is a high probability that Russia may be already using this to earn a hefty revenue to manage its economy and the huge wartime expenses under the economic sanctions imposed on it.

What are some of the other ways Russia may use crypto to earn more revenue by evading the sanctions?

Well, multiple experts have pointed out in the past that the two words: Russia and Ransomeware attacks are synonymous. As it has been found that the majority of all ransomware attacks are caused by Russian hacker groups and experts believe that most of these groups unofficially work under the Russian government. Hence, the Russian government unofficially orchestrates these attacks to earn a sizeable revenue via Ransomes. But wait, what role does crypto play in this? Well, crypto is the very essence of a ransomware attack. Hackers ask the victim to pay the ransom in crypto as it is mostly untrackable. Hence, helping the hackers to get away without facing the risk of the authorities being able to trace the transactions back to them.

On the other hand, experts also warned that Russia may directly try to evade the sanctions by directly dealing in crypto as a legal tender with its foreign allies but this idea was recently shot down by the US Treasury Secretary, Janet Yellen. She pointed out that Russia doesn’t have that kind of a developed crypto infrastructure to handle such large scale transactions or operations needed for it to completely avoid the sanctions in the first place and further, a sudden rise in large scale crypto transactions would be easily spotted by various Blockchain analytics, who are always checking and scrapping the network for any signs of irregularities.

Conclusion

Well, it may be sadly true that Russia may use crypto to avoid the sanctions and keep on funding the war against Ukraine which we aren’t supporting in any way. However, the fact is that this is the very nature of crypto. Crypto was originally made with the sole intention of getting away from any centralised authorities which the Russian government is trying to currently do against the global sanctions implemented on it by other nations. However, we must also work on the proper regulations needed to manage the crypto ecosystem as well. As this is also true that crypto is also being used to fund and support illegal activities. Unless a set of uniform guidelines are put in place on a global level, this kind of issue will keep on happening again and again.

That will be all for now folks. Make sure to subscribe to our newsletter to receive weekly updates on all kinds of interesting topics.

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I am an avid tech lover. I mainly write articles on technology & crypto-related topics.

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