Former CIA Analyst Says Crypto Market Not Large Enough To Offset Russian Losses But Small Scale Entities And Oligarchs Could Gain ⋆ ZyCrypto

• A CIA analyst says the crypto market is too small for Russia to evade sanctions. 
• While oligarchs could practically move small amounts of money, blockchain technology can make such transactions trackable. 
• Russia has been hit with a wave of sanctions from western powers over its invasion of Ukraine.

In a CNBC interview with industry experts and former CIA economic analysts, it was revealed that the crypto market was not a practical solution for Russia. However, exchanges have to be placed on high alert for oligarchs and entities that might use cryptocurrencies to evade sanctions.

The Crypto Market Is Not Sizeable Enough

CNBC, in a bid to understand how practical it is for Russia to turn to the crypto market to offset losses from sanctions, interviewed industry players and experts to get their thoughts on the show “Crypto Night In America.” The line-up included Alex Zerden of Capital Peak Strategies; Yaya Fanusie, a former economic analyst in the CIA; and Michelle Bond, CEO of the Association for Digital Asset Markets.

Yaya Fanusie, a former CIA analyst, noted that the “crypto market is not sizeable enough” for Russia to evade or soften the blow of sanctions. Fanusie revealed that the real risk lay with sanctioned oligarchs and entities that might be trying to move money through the crypto market.

Michelle Bond noted that the Treasury Department and the NSE have also both come to the same conclusion that Russia cannot use crypto to evade sanctions, contrary to concerns raised by Senator Elizabeth Warren. Speaking on the risk of oligarchs using crypto, she stated that industry players were working with the government to ensure this did not happen by identifying “assets of sanctioned individuals.” Bond revealed that, unlike fiat, “there are so many ways that crypto can monitor illicit activity.”

As concerns grow, Ukraine and other parties have mounted pressure on crypto exchanges to terminate their services to Russians. At the same time, Alex Zerden noted that in enforcing sanctions, there has to be a “fine balance” between putting pressure on the Putin administration and hurting everyday Russians who might be opposed to the war effort. 

Fanusie concluded the discussion by noting that, at the moment, while there are concerns around the support given to Russia by China, due to China’s position on digital assets, it is not likely to extend to cryptocurrencies. However, he said that the concern is more in the long-term as most states are under pressure at the moment to not work with Russia.  

Elizabeth Warren’s Concerns

A lot of the conversation in recent times surrounding the potential use of cryptocurrencies by Russia to evade sanctions has been generated by the activities of Elizabeth Warren. Warren is said to have authored a bill to stop Russia from sidestepping sanctions with crypto.

While Warren believes her new bill will “ensure crypto isn’t used by Putin and his cronies to undermine our economic sanctions,” the bill has raised privacy concerns in the crypto community. Provisions of the new bill may require information surrounding the identity of private wallet holders.

Billy Markus, one of the creators of Dogecoin, tweeted requesting that the senator be stopped from “using war to ruin innovation and destroy privacy.” Seeing as many institutions agree that using crypto to evade sanctions would be impractical for Russia, it brings into question the necessity of such a bill.