Crypto has a debatable topic when it comes to the Ukraine-Russia war as it can aid Russia in many ways

The phenomenon of crypto has been under scrutiny for quite a long time now. In response to Russia's invasion of Ukraine, a transnational effort is initiated that aims to isolate Moscow from the global financial system. The international response has been quite spontaneous, resulting in Russia, now facing widespread and sweeping sanctions. While the European Union imposed sanctions aimed at the Kremlin interests, the Biden government, denounced the invasion by declaring another tide of sanctions focusing on Russia's banks and state-owned enterprises. The UK government also has imposed sanctions to weaken Russia's economy and target the oligarchs and other government institutions helping the Russian President to carry out these attacks. Among these sanctions imposed on Russia, experts believe that it will be quite easy for the Russian government to evade sanctions if the government can completely utilize the potential of crypto. 

The European Union has been considering new measures to ensure that Russia is unable to use virtual currencies to dodge these sanctions as the 27-nation bloc of countries toughens its enforcement of the financial penalties imposed on the Russian government. Experts believe that even though other countries are engineering a wide-ranging suite of cryptocurrencies, ensuring compliance is a different objective altogether. As Moscow faces a financial meltdown, speculation as to whether Russian individuals and businesses will turn to crypto to work around the sanctions, with pressure mounting on crypto exchanges to address violation concerns. 

How do the EU and Western countries ensure that Russia is unable to evade sanctions using cryptocurrencies?

According to several reports, the European Union is undertaking several measures to make sure that cryptocurrency exchanges and the Russian economy comply with the sanction regulations. Binance, the world's largest cryptocurrency exchange will be taking the necessary steps against those who have sanctions levied against them. However, the exchange will not ban general Russian crypto investors, since it might go against the spirit of crypto, which has long been considered as a means of financial property opposing censorship that banks and governments are generally based on. But to oppose the attacks, key Russian figures and financial institutions have been placed on the US's sanction lists that also effectively prohibit American firms from doing business with them. 

The fact that Russia can use cryptocurrencies to evade taxes has ensued a particularly heated debate regarding the role of Bitcoin in this entire phenomenon. This is due to the fact that Bitcoin and other digital currencies are often decentralized. But inculcating a new, transparent, and immutable nature of public blockchains would indicate that exchange owners need to collect detailed information to ensure that Russian heavy-weights carry out the required sanction requirements while maintaining regulations of the crypto ecosystem. While sanctioning governments are unaware of the true identity of the addresses sending the cryptos, exchanges are being instructed to flag any suspicious addresses, the funds of which should be monitored. 

Since, Russia's Ukraine invasion, approximately US$19 million has been donated to Ukraine in the form of cryptocurrencies to boost the functionalities of the country's military efforts and volunteer groups. Global organizations have taken several initiatives to make sure that Russia weakens in terms of economy and helps Ukraine come out of this devastating state of affairs.