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Ripple CEO, Brad Garlinghouse gives his thoughts on Russia using crypto to counter-sanctions.
Following the recent stern measures meted on Russia’s banks by western nations, forbidding these financial institutions from accessing the Society for Worldwide Interbank Financial Telecommunication (SWIFT), many have suggested that the country could use crypto to evade sanctions.
The assertion was made because crypto transactions are believed to be pseudonymous. The debate has been joined by many, who fear that Russia’s use of cryptocurrencies could see heavy sanctions administered on crypto-related firms that could ultimately hurt investors in the space.
Garlinghouse Doesn’t Think So
Refuting claims that Russia could turn to cryptocurrency to evade sanctions, Brad Garlinghouse, Ripple’s CEO and co-founder noted on his Twitter page that the country cannot use the asset class to evade global sanctions.
I continue to see asinine arguments from uninformed pundits of how crypto works. I want to reiterate what @ashgoblue said yesterday – there are factual reasons why crypto can’t be used on the broad scale for Russia to evade sanctions. https://t.co/WmQC4sHcSa https://t.co/Pk2fy9iUV8
— Brad Garlinghouse (@bgarlinghouse) March 2, 2022
Narrating the procedures of running a cryptocurrency exchange, Garlinghouse noted that global crypto trading platforms rely on various banking partners who could lose their licenses when a blacklisted nation or individual is able to evade all relevant measures put in place to conduct transactions on these platforms.
Garlinghouse stated that cryptocurrency exchanges have established stringent measures, which include requesting their users to abide by KYC/AML requirements, in a bid to stop this unfortunate development from happening.
“In order to convert crypto to fiat, exchanges/etc rely on banking partners who could lose their licenses if someone on the OFAC list is able to slip through. Extremely stringent KYC/AML policies are in place to avoid precisely this.
RippleNet, for example, has always been – and remains today – committed to NOT working with sanctioned banks or countries that are restricted counterparties. Ripple and our customers support and enforce OFAC laws and KYC/AML,” Garlinghouse added.
Garlinghouse’s comments back those made by Asheesh Birla, Ripple’s General Manager, where he gave several reasons why it is impossible for Russia to use crypto to evade these financial restrictions, including the fact that crypto transactions are becoming more trackable by government and software.
“Instead of listening to responsible players who have been clear they will abide by legal sanctions, some pundits and media insist on continuing to paint crypto as the Silk Road,” the Ripple CEO concluded.
Russia’s Continuous Scrutiny
Russia has been under heavy scrutiny from around the world, including Vitalik Buterin, Ethereum’s co-founder, for evading Ukraine. A number of sanctions have been meted out on Russia in a bid to cripple the country’s economy.
Meanwhile, these sanctions saw Bitcoin overtake the Russian Ruble to become the 14 largest currency by market capitalization.
Ukraine decided to take things to the extreme over the weekend by requesting global cryptocurrency exchanges to freeze the accounts of users living in Russia and Belarus, to further cripple the Russian economy.
Refusing the request, a few exchanges, including Binance and Coinbase, said they would not prevent Russian residents from using their platforms as such a move would harm civilians and fly in the face of economic freedom of crypto-economic ideology.