Russian Individuals Tackle Securing Assets by Using Crypto

Purchases of cryptocurrencies in rubles are at an all-time high after the situation between Russia and Ukraine, which raises questions about whether Bitcoin (BTCUSD) can help if not the government of Russian Federation, but at least ordinary people alleviate the brunt of sanctions.

The newly imposed sanctions include the exclusion of a set of Russian banks from the international SWIFT banking messaging system, which makes them isolated from the rest of the world. The SWIFT system allows banks to exchange information about transactions quickly and securely. The cut off of Russia is intended to prevent it from trading with much of the world.

It’s worth knowing that the Russian ruble dropped 27% against the dollar since the beginning of the year, upstaging the Turkish lira as the worst performing currency of the year, and is trading at more than 100 rubles per U.S. currency unit, the lowest level on record.

However, an analytical group Chainalysis said in a statement that it is “optimistic that the crypto industry can counter attempts by Russian entities to evade sanctions.” The group pointed out that blockchains, or ledgers of transactions made by digital currencies, allow Western governments to detect violations. At the same time, North Korea and Iran managed to at least partially circumvent sanctions exactly thanks to liberalization of cryptocurrencies in their countries.

Crypto exchange Binance said earlier on Monday it was not going to block accounts of Russian users despite calls from some Ukrainian politicians to take such action.

"We are not going to unilaterally freeze millions of innocent users’ accounts," a Binance spokesperson told CNBC. "Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists," the company added. However, Binance stressed that it will block accounts of Russians targeted by sanctions.