Experts say Russia may not be able to sidestep sanctions using cryptocurrencies, which have become a regulated business with safeguards against money laundering
This piece flips the frame from three days earlier, when coverage warned that Russia could use cryptocurrency, a forthcoming digital ruble, and ransomware spoils to minimize the impact of US sanctions. Here, experts argue the opposite: crypto has matured into a regulated business whose anti-money-laundering safeguards make it a poor sanctions escape hatch.
The later record complicates both claims. A [[a:843393|Wall Street Journal investigation found Binance still handling substantial ruble trading through intermediaries despite scaling back in Russia in 2022]], and by late 2024 Russia's finance minister said Russian companies had begun using bitcoin in international payments — evidence the channel exists even if it stays small.
First-order effects
Russian entities trying to move sanctioned value through crypto must pass through exchanges and off-ramps that apply know-your-customer and AML checks, making those venues the immediate chokepoint.
Second-order effects
Western-facing exchanges like Binance face intensified compliance and reputational pressure over residual ruble flows, while Moscow's push for state-run alternatives — the digital ruble and the planned cross-border crypto trial — shifts evasion attempts toward channels it controls directly.
Third-order effects
If the pattern holds, sanctions enforcement migrates into crypto infrastructure itself: the same public ledgers and regulated on-ramps experts cite as safeguards turn blockchain into a surveillance surface, leaving only small-scale, harder-to-trace workarounds outside major venues.
The trend: Sanctions evasion is migrating from a feared crypto loophole toward a cat-and-mouse between regulated exchange chokepoints and state-built payment alternatives.
The sanction nobody is talking about. Russian users who attempted to visit pornhub were quite literally cockblocked by a message that told them that the content has been stopped along with a Ukranian flag and message of Ukranian support #Ukraine #UkraineRussia #UkraineInvasion ht…
The failure to properly deal with ransomware actors has poisoned a lot of lawmakers and regulators against cryptocurrencies; a failure to stop massive sanction violations would bring a lot of normal citizens off the bench calling for onerous regulatory regimes.
Legitimate cryptocurrency companies need to be planning right now for what happens if Russia gets kicked off of SWIFT and turns to BTC and other, less monitored coins to prop up their economy and sell oil.
When it comes to evading U.S. sanctions, Russia is almost certainly going to turn to digital assets. I'm talking about the yuan, of course. Crypto is a rounding error of a rounding error vs. what will likely be Russia's cozy embrace of the digital yuan.
One lesson of these central bank sanctions is that crypto currencies work very well except in an emergency. All those doomsday scenarios the crypto bros talk about? You're going to want a big stack of physical Euros and paper dollars when the Internet crashes.
Counterpoint: crypto has become so centralized that it might be impossible for Russia to convert to fiat while avoiding sanctions https://www.nbcnews.com/...
This is why you shouldn't participate in projects that use crypto when they don't need to: your cool project creates liquidity and legitimacy for an off ramp for bad actors. https://twitter.com/...
I like the idea that it is in any way a question whether cryptocurrencies will be used to violate sanctions, when it's as close to the reason for their existence as it is possible to get https://twitter.com/...
“Virtual currencies are sometimes associated with lawlessness, but the reality is they've become a regulated business with safeguards against money laundering.” https://www.nbcnews.com/... via @nbcnews
western law enforcement has good visibility into the on and off ramps for cryptocurrency networks. they seem confident that they have the tools needed to tackle any russian attempts at sanctions evasion https://www.nbcnews.com/...
“Any Russian-owned companies the FCC identifies as potential security risks to the United States could face tougher scrutiny from regulators, including the potential risk of being ejected from the US market.” https://twitter.com/...
TSMC says it is fully committed to complying with new export controls after Taiwan's government said it would join global sanctions on Russia over Ukraine. (TSMC is the world's largest semiconductor manufacturer and dominates leading edge technologies.) https://www.reuters.com/..…