Using Crypto to Avoid Sanctions Is A Myth

Chengpeng Zhao, aka CZ, CEO of Binance – believes that cryptocurrencies are a terrible option for evading sanctions.

Cryptocurrencies have come in aid to the Ukrainian government as well as the several NGOs that have managed to secure donations to help the war-stricken country distribute emergency resources and push back against Russian invasion.

However, concerns regarding deep-pocketed Russian oligarchs trying to slip past the impact of Western sanctions by using cryptocurrencies have also heightened. CZ, for one, believes that “nobody smart” would choose crypto to do that.

Cryptocurrencies, A Weapon For Warmongers?

In an interview with CNN, CZ highlighted that crypto is too traceable due to the underlying blockchain technology and added,

“If you look at the data, nobody smart does that. Crypto is too traceable, the governments around the world are increasingly very good at tracking crypto transactions. So crypto is not good for that.”

Binance had joined other cryptocurrency giants such as Coinbase and Kraken in declining to unilaterally freeze millions of Russian user accounts even though it said that the platform complies with government sanctions.

When asked about his take on the ongoing war, CZ said that Binance is totally against it, the politicians, and dictators who start wars. However, the exec went on to clarify that,

“We are not against the people. There are many people on both sides of Ukraine and Russia that are suffering and we want to help those people.”

Illegal Trade: Fiat Vs Crypto

Despite increasing concerns about crime and sanctions evasion related to cryptocurrencies, it is important to understand that fiat is still very common when it comes to illegal trade. This is something that not just CZ emphasized, but US Treasury Department had recently confirmed.

In its report that included money laundering, terrorist financing, proliferation financing, and the role of virtual assets in all aspects, the US Treasury Department stated that the use of this asset class for money laundering remains far below that of fiat currency and more traditional methods.

Earlier last month, Tom Robinson, co-founder of blockchain forensics firm Elliptic weighed in on the matter and stated that crypto is not a perfect solution for dodging authorities as blockchain assets are known to note have the best privacy that, makes large-scale transfers and purchases complicated to conduct without being identified.