Russia invaded Ukraine<\/a>. There are growing concerns that the country\u2019s magnates are converting rubles to bitcoin in order to skirt the global restrictions on their accounts. The nature of cryptocurrency \u2013 which exists in a closed system and is not regulated by central banks \u2013 could allow Russian users to hold onto their capital and eventually convert it to dollars.<\/p>\nWhat\u2019s more, while the ruble has fallen in recent days, bitcoin is on the rise, meaning the oligarchs would not lose any purchasing power. Cryptocurrency movements are not tied to a user\u2019s identity, unlike bank transactions, which have been affected by the decision to ban Russia from the SWIFT payment platform and the fact that Visa, Mastercard and American Express have suspended all operations in the country.<\/p>\n\nMore information<\/header>\n<\/aside>\nSo are Russian oligarchs using cryptocurrencies to avoid the West\u2019s economic sanctions? That could be the case. But most of their capital was probably already safe before the sanctions were introduced. \u201cWe have to take into account that these oligarchs may have their fiscal residence in another country, or have groups of companies that operate in different jurisdictions, making it possible to at least partially avoid the new sanctions,\u201d said Mois\u00e9s Barrio, a lawyer for the Spanish Council of State and the author of the book Criptoactivos. Retos y desaf\u00edos normativos<\/i> (or, Cryptocurrencies. Challenges and regulatory obstacles).<\/p>\n
But there has been movement. As the French financial daily Les Echos<\/i> noted, some of these magnates began buying up cryptocurrency months ago. But it\u2019s yet to be seen whether they will be able to recover their money. This will largely depend on how much digital currency platforms, also known as exchanges, decide to get involved in the conflict.<\/p>\n
On Monday, February 28, representatives from the White House and the United States Treasury met with some of the major exchanges to ask them to stop operating in Russia in order to comply with Washington\u2019s sanctions<\/a>. On Thursday, Binance, one of the largest trading platforms, refused. \u201cWe differentiate between the Russian politicians who start wars and the normal people, many normal Russians do not agree with war,\u201d Chanpeng Zhao, the founder of Binance, told BBC Radio 4 on Thursday.<\/p>\nThe following, Coinbase, another major exchange, also refused to comply. \u201cWe believe everyone deserves access to basic financial services unless the law says otherwise,\u201d said Brian Armstrong, the company founder, in a message on Twitter<\/a>. Jesse Powell, the founder of the trading platform Kraken, also justified his refusal on Twitter<\/a>, arguing: \u201cSometimes the hardest thing about having power is knowing when not to use it.\u201d<\/p>\n