Russian individuals and companies are using crypto to evade sanctions, the European Central Bank says
- The president of the
European Central Banksaid the Russian private sector is using cryptoto get around Western sanctions.
- Crypto assets "are certainly being used, as we speak, as a way to circumvent the sanctions," said Christine Lagarde.
Russian individuals and corporations are turning to cryptocurrencies to evade Western sanctions, the European Central Bank President Christine Lagarde said Tuesday.
The volume of rubles being exchanged for crypto has hit its highest point since May 2021, she said at a virtual event.
Crypto assets, Lagarde added, "are certainly being used, as we speak, as a way to circumvent the sanctions that have been decided by many countries around the world against
Some in the industry have said crypto presents an opportunity for Russia to mitigate the impact of the economic sanctions, but others have dismissed the idea. While the Russian private sector is showing signs of turning to crypto, the public sector is a different story.
Last week, a slate of crypto experts told US lawmakers that there's no sign the Russian government or President Vladimir Putin are using cryptocurrencies to dodge sanctions.
"You can't flip a switch overnight, and run a G-20 economy on cryptocurrency," said Michael Mosier, a deputy director at US enforcement agency FinCEN. "It's an access problem, it's a rails problem, and it's just a basic liquidity problem. Certainly, there's going to be an element [of crypto] that's part of their playbook. But it frankly isn't at the top of the list."
And earlier this month, Ari Redbord, head of legal and government affairs at blockchain and risk management firm TRM Labs, said any government-level pivot to crypto this remains unlikely.
"I don't think cryptocurrency is a reasonable off-ramp for sanction evasions," he previously told Insider. "The combination of the lack of liquidity in the crypto market to sustain the Russian economy, as well as strict compliance controls in the larger crypto exchanges will make it impossible for the Russian central bank to even move any crypto."
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