Tether rejects Ukrainian appeal of banning Russian transactions

TL;DR Breakdown

The cryptocurrency industry is highly influenced by global events. The same phenomenon is being observed during the conflicts between Russia and Ukraine. Since the initiation of war, the global financial markets have experienced a swing in trends and price patterns. The crypto market has fluctuated severely in light of rumors and global developments.

As the world moved against Russia, several sanctions were imposed by the US and the Western World. The Russian Ruble crashed, and the country’s economy plunged by a significant margin. At the same time, there were calls for crypto sanctions on Russia. Several experts anticipated that crypto could be a way out for Russians during these circumstances. However, several blockchain companies and cryptocurrency showed their resentment towards this decision. Tether has also joined the same group of organizations.

Decentralization and Ukraine’s plea for crypto bans

During the ongoing war, Ukraine’s Prime Minister Mykhailo Fedorov has remained quite active on Twitter. He has been asking for donations in fiat as well as in crypto after setting up official wallets. Moreover, Fedorov has also reached out to the heads of several crypto networks, and influential personalities to condemn and ban Russian consumers.

Similarly, Fedorov recently tweeted directly to Tether and its chief technology officer, Paolo Ardoino. In the tweet, the Vice Prime Minister called on Tether to stop any transactions with Russians to ensure peace. He also referred to the democratic world which has gathered to hurt Russia economically. However, Tether showed its resentment on any such decision. The organization claimed that it is adhering to international economic sanctions on Russia, and will not initiate any other measures by itself.

Previously, Fedorov called out several Western companies to impose a similar ban. He also contacted major crypto exchanges, like Coinbase, Binance, and Kraken to stop providing services to their Russian consumers. But all of these exchanges responded that such a step will go against the primary concept of crypto and blockchain. Therefore, they did not take any such step.

Decentralization is one of the most significant characteristics of the crypto world. It promises that no regulating authority or government body has any control over a cryptocurrency. Due to this, calls for a ban on Russian users were considered against the principles of crypto space. Therefore, several companies, including Tether, were reluctant in taking any such initiative.

Authorities continue to scrutinize Tether

Tether is the most popular and most used stablecoin in the crypto world. All over the globe, it is being used to link fiat with cryptocurrencies. People use it to move capital and acquire cryptocurrencies, like Bitcoin and Ethereum. A large number of Russians also carry out similar economic activities through it. Recently, the money flown into the Russian Ruble has also increased significantly from last year. Tether seems to be the most utilized asset for crypto trading in Russia.

This is primarily the reason for the direct appeal of Ukraine’s Vice President to Tether. Nonetheless, Tether also has several other battles to fight against. It has been on the hit list of regulatory authorities for quite a while. The New York Attorney General had sued the company, complaining that it lies about its reserves and plays with the funds of the users. However, Tether settled the lawsuit. But the company did not admit or deny the claims made against it. Several experts have also criticized Tether that it is not fully backed by the US Dollar, and it is a big sham.

Nonetheless, it is yet to be seen how the experts or the Ukrainian authorities respond to the indirect answer from Tether. It is unlikely that any of this will have an impact on the global use of Tether. However, it still indicates that the crypto world is not in favor of any crypto bans on Russia.