Cryptocurrencies have been all the rage lately, and for good reason. They offer a way to make secure and anonymous transactions that can be done from anywhere in the world. This has caught the attention of many people, including Russian oligarchs.
In this blog post, we will take a look at some of the cryptocurrency transactions and investments made by Russian oligarchs and what their motivations might be. Stay tuned!
Russian Oligarch’s Cryptocurrency Investments
The cryptocurrency industry has been quietly lobbying U.S. politicians against legislation aimed to discourage Russian oligarchs from using virtual currencies to get past sanctions placed in place after Russia invades Ukraine.
A lobbying group called the Blockchain Association, which is made up of more than 70 cryptocurrency companies like Crypto.com, Ripple, and Dragonfly Capital is attempting to persuade Congress that affluent Russians aren’t using cryptocurrencies to evade sanctions.
Working with lobbying firm Forbes Tate Partners, it is fighting legislation that would impose additional sanctions on already-punished Russians who are trying to use cryptocurrency to evade them.
The law also gives the Treasury secretary the authority to forbid cryptocurrency trading platforms with U.S. headquarters from conducting business. The Biden administration will have the power to forbid American cryptocurrency exchanges from accepting payments from Russia thanks to two bills that have been submitted in the U.S. House and Senate.
The proposals would also provide U.S. officials the power to impose sanctions on foreign exchanges that handle transactions for Russian individuals or entities that have been subject to sanctions.
The legislation poses a serious threat to the sector, which detractors claim has grown popular for covert business since transactions cannot be tracked. It would essentially bind digital currencies to some of the same regulations that demand federally insured banks to know their customers, fight money laundering, and notify regulators of suspect transactions.
In an email, the group’s spokesman, Curtis Kincaid, claims that the organization is assisting Congress in “separating fact from fiction on the inability of Russia to transfer huge sums of money via crypto transactions to dodge sanctions.” A representative of Forbes Tate Partners declined to respond to inquiries from CNBC and instead sent them to the Blockchain Association.
The Blockchain Association’s policy director, Jake Chervinsky, then claimed that the legislation is specifically directed at American cryptocurrency companies and does not target Russian oligarchs.
Since Russian oligarchs are unable to use cryptocurrency to circumvent sanctions, these bills do not target them. As part of @SenWarren’s fight against a technology she doesn’t comprehend, they target honorable US crypto enterprises, according to Chervinsky, who stated this in a tweet following the publication of this article.
The cryptocurrency sector has intensified its lobbying efforts as the Biden administration considers whether and how to regulate digital assets. An executive order signed by President Joe Biden in March urged regulators to look into the advantages and disadvantages of cryptocurrency.
Since its founding in 2018, the Blockchain Association has spent a record $460,000 on internal lobbyists, according to records of lobbying disclosure. The crypto lobbying firm said that almost $4 million was given to it by three major crypto companies last year: Kraken, Digital Currency Group, and Filecoin Foundation.
The Russian Digital Asset Sanctions Compliance Act is being lobbied against, according to the organization’s first-quarter report. The Russians and the companies they run who use bitcoin to get around their sanctions would be targeted by the House measure. Leaders in the bitcoin industry assert that using digital currencies to circumvent sanctions is impossible.
However, given that the sector promotes itself as an alternative banking system, some lawmakers argue that digital currencies should be subject to the same regulations as banks. Numerous financial institutions, including Russia’s central bank, have been sanctioned by the United States. The Treasury Department recently targeted Russian bitcoin miners.
“The cryptocurrency sector views itself as an alternative banking system. A co-sponsor of the House bill and a Democrat from California named John Garamendi stated this in a recent interview with CNBC.
“Banks have been sanctioned left, right, and center and banks are moving out of Russia. They are in the same category, in the same condition as a Russian bank or Bank of America, if they consider themselves to be a financial mechanism.
The law is intended to offer the Treasury Department the tools it needs to strengthen its control of cryptocurrency platforms, according to Warren, a senator, and member of the influential Senate Finance and Banking committees. Warren recently stated this to National Public Radio.
“Russian oligarchs can continue to transfer funds using cryptocurrencies. Therefore, we’re going to give Treasury the go-ahead to treat these cryptocurrency platforms similarly to how banks are treated. Warren stated in the interview last month that you must know your consumer and that dealing with those who are breaking the law is prohibited.
Warren claimed that the cryptocurrency sector was compromising American national security and the sanctions imposed on Russia.
In a statement sent via email, Warren said, “It’s shocking that they’d also work to undermine U.S. national security and our sanctions regime against Russia, but it’s not surprising that the unregulated crypto industry has deep pockets and an army of lobbyists fighting against fundamental regulations to keep consumers safe.
Articles You Might Enjoy Reading
Do Russian Oligarchs Want War?
What Do Russian Oligarchs Think Of Putin?