According to the data provided by blockchain-analysis firms, there has been a fall in the Russian-denominated crypto trading and purchasing across major exchanges. This has debunked theories that the country will look towards digital assets as a way to evade the sanctions imposed. Last week, Bitcoin had seen a 15% rally in its price and this had been attributed by some experts to the increase in crypto purchases in Russia because of the increasing number of economic sanctions. However, it appears that the theory was a false one because Chainalysis provided data, which indicates that the trading volume denominated in ruble was about $34.1 million on Thursday.
On February 24th, a week ago, this trading volume had reached a peak of about $70.7%, which indicates that it has plunged by nearly 50%. When it comes to sanctions-fueled crypto buying, analysts have said that the Russian volumes have not been that high, which indicates that the price action that Bitcoin saw was mostly because investors were just positioning themselves for an increase in demand from Russia, rather than an actual increase. Even though experts have rejected the notion of Russia being able to use crypto for evading the sanctions, it has not stopped the European Union and the United States from increasing their regulatory scrutiny of the crypto space.
The New York state recently enhanced its blockchain surveillance capacities in order to ensure that digital assets, or cryptocurrencies cannot be used for supporting Russian interests. On February 27th, Kathy Hochul, the Governor of NY, had also issued an executive order that directed state agencies to divest from Russian companies and institutions, along with those companies that offer them support of any kind. She stated that New York was home to the largest Ukrainian population in the US and would use their technological assets for protecting the people and for holding Russia accountable.
BlockchainAssociation in the United States’ head of policy, Jake Chervinskyalso highlighted the narrative’s other side. He said that these concerns about cryptocurrencies were completely unfounded. Head of government and legal affairs at TRM Labs, a crypto crime investigator, Ari Redbord also echoed the same sentiments. He said that it was too late for Russia to use crypto assets to enhance its liquidity and that the blockchain’s public nature can already act as a deterrent for anyone who tries to use it for circumventing sanctions.
He said that it is not possible for Russia to use crypto for replacing the billions of dollars that would be frozen as a result of sanctions. Due to the possibility of regulatory action that may be taken by the international community, a number of leading crypto exchanges in the world have already gone ahead and blacklisted sanctioned organizations and individuals on their platform. However, Binance, Coinbase and Kraken, amongst others have denied the request of Ukrainians to block the accounts of ‘innocent’ crypto users. Nonetheless, a number of other crypto-related companies and businesses have also pulled away from Russia in light of its invasion of Ukraine.