Mar 8, 2022
Hilary Clinton VS Russian Crypto
Despite cryptocurrencies facing the biggest regulatory movement since the Federal Reserve’s announcement of tax brackets becoming compulsory for the industry, members of the U.S government and influential politicians such as Hilary Clinton have been urging the need for even more constriction.
This comes as a result of the ongoing war between Russia and Ukraine, which is forcing many crypto exchanges to ban all Russian nationals from holding any assets. Will Clinton’s words force exchanges to shut their Russian accounts and what will this do to the overall market? Let’s take a look.
What is happening?
After the recent invasion of Ukraine by the Russians, many, including the Vice Prime Minister of Ukraine have called for an increase in sanctions, including a request to ban Russians from holding cryptocurrency assets. However, major exchanges such as Binance and Kraken have refused to accept this proposal, deeming it as the exact opposite of what a decentralised network has been built for. While Russians who have been individually sanctioned will not be able to hold their wallets for much longer, the exchanges will not be closing down the accounts of other users till now.
Hilary Clinton Responds
Hilary Clinton has been an avid supporter of making cryptocurrencies highly regulated. But in an attempt to provide even stronger constraints on the digital assets market, Clinton shared her discontent for various crypto exchanges’ decisions to not ban Russian users.
Speaking in an interview on MSNBC, Clinton said, “I was disappointed to see that some of the so-called crypto exchanges, not all of them, but some of them, are refusing to end transactions with Russia”. She further went on to say that the various exchanges should do as much as they can to isolate Russian economic activity by increasing sanctions.
But, picking off on the Russian-Ukraine tensions, Clinton also said the following — “I do think that the treasury department and the Europeans, should look hard at how they can prevent the crypto markets from giving an escape hatch to Russia, both governmental and private transactions in and out of Russia”.
Her thought process stems from the fact that Russians may be using cryptocurrencies to bypass various transactions and use them to funnel money in and out of the country. The Russian Ruble has taken a massive hit after the various sanctions that have been imposed from countries like the U.S, UK, France and more. This has caused their currency to take the highest ever drop in history, leaving cryptocurrencies as a valid source of transactions.
Ukraine’s Crypto Community
Along with Clinton, the Ukraine government, via Mykhailo Federal, the vice Prime Minister of the country are trying to crack down on Russians using crypto-wallets.
https://twitter.com/FedorovMykhailo/status/1497534656786403332
US senator asks for more scrutiny against Russian crypto users
U.S senator, Elizabeth Warren, thinks that cryptocurrencies will play a role in undermining sanctions that have been imposed on Russians. She has also urged the various exchanges to take this threat seriously and try to condemn the use of digital assets for the country even more so.
https://twitter.com/SenWarren/status/1499380461587496962
While her reasons for this may have been justified, the backlash has been immense. Several users have criticised her comments, especially because of the decentralised nature of cryptocurrencies. Since they are stateless and permissionless, regulating and controlling who can buy them defeats the whole purpose of why the digital assets were introduced in the first place.
Others who criticised her comments were Jerry Brito, the executive director of D.C based think tank Coin Centre. Warren attached a link to a New York Times article in her tweet, which talked about how Russia may have developed new tools that could help them in hiding various cryptocurrency transactions. Brito noted that the article was vague at best, without any real explanation of how this may be conducted. He also notified that this would not be nearly as enough to make up for the stringent sanctions that have already caused the Russian economy to collapse.
At the end of the day, different country governments can choose to sanction and ban cryptocurrencies for Russians individually, until then at least the big exchanges have yet to change their thoughts on the matter. But with some of the top politicians breathing fire down the neck of the big crypto-based companies, we may see a total ban of cryptocurrencies in Russia.
Currently, this would be a huge hindrance for the digital assets community, which has been rebounding well at the beginning of March despite the political uncertainty being caused in Europe.
