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Will the cryptocurrency help to bypass the sanctions

24 July 2018 13:08, UTC
Oleg Koldaev, Catherine Lange

The authorities of the USA confiscated from Iranian citizens about 500 bitcoins ($ 6 million). In the opinion of American controlling bodies, citizens of the Islamic Republic tried to circumvent North American sanctions with the help of cryptocurrency. But is it possible? And don’t the anonymity of digital equivalents belong to the number of myths?

The idea of circumventing all sorts of sanctions with the help of cryptocurrency has appeared for a long time. About a year ago the President of Venezuela, Nicolas Maduro, announced the creation of the "Blockchain Observatory", an institutional organization whose task was to study the economic and legal conditions for the creation of its own cryptocurrency. Vladimir Putin at the Youth Forum "Territory of Meanings-2015" made possible to use cryptocurrencies for some "segmental calculations," but later cautioned about the high risks in its use. At the same time, Sberbank has purchased thousands of 3D video cards (a tool for mining).

The cryptocurrency market is actively developing in African countries, many of which are on the sanctions lists. For example, only about 30% of adult residents of the black continent have a bank account, but mobile accounts are already in 50% of the population (Gabon, Kenya, Sudan, etc.). The territory of Zimbabwe has its own crypto exchange Golix.io. And the trading volumes and the cost of bitcoin on this site is much higher than on similar in Europe or the USA.

The already mentioned Iran, although did not allow the use of cryptocurrency in its territory, actively develops mining and even thinks about state support for this undertaking.

Many countries-"outcasts" see an exit in the cryptocurrency market. And, in some cases, it is fully justified. Indeed, calculations in the crypt are practically anonymous, it is much more difficult to track such transactions than the fiat ones. And non-issue non-state status allows bypassing the limitations of various regulators. And if tomorrow Donald Trump fulfills his threat and "nullifies" Iranian oil exports, then Iran can well offer it in the world market for bitcoins.

However, in practice, everything is somewhat more complicated. And the matter here is in American legislation (Article 102 of the USA law HR 3364 (CAATSA).There is such a thing as "personal law." That is, for citizens of the country, organizations established on its territory, or foreigners legally working in the territory of the States, The personal law is the law of the USA Accordingly, the law on sanctions extends not only to the direct participants of the lists but also to the persons assisting them and counterparts, and the responsibility, in this case, is serious-up to 20 years in prison.

The fact that America is a law-abiding country can be seen in the example of the Coinbase exchange. Which on the first request issued personal data of users who committed transactions worth more than $ 20 thousand, the national service of domestic revenue. Moreover, in order to transfer bitcoin into any fiat currency, the bank's participation is required. And he, in turn, brings all information on suspicious transactions to the attention of the competent authorities.

So, the sub-states and citizens, in fact, have no chances to do anything and go unnoticed.

However, why is this myth so tenacious?

It seems that it's all about social psychology. Bitcoin, for example, has earned a reputation as a means of payment that is not integrated into the existing world order. There is no country to which it belongs; there is no central bank that regulates it; there is no right that describes and controls it. This institutional vacuum creates the illusion of freedom and anonymity. To which these naughty Iranians were bought. And they lost money.