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Cryptocurrencies infiltrate Ukraine Conflict


Cryptocurrencies infiltrate Ukraine Conflict

Ukraine’s Crypto Sector Has Been Affected By Russia’s Invasion

After evacuating part of his team from Kyiv, Mike Chobanian, the boss of crypto exchange Kuna, is tracking the effects of the Russian invasion on his burgeoning industry with his children. tired eyes.

“The business is working, but we are in survival mode here,” the 37-year-old boss said in a video call from his current hideout after leaving the Ukrainian capital.

Russia’s military build-up led many Ukrainians to switch to cryptocurrency, before the invasion took over the sector.

But it is still facilitating global fundraising efforts, albeit through an opaque decentralized system that Russia could also exploit to circumvent sanctions.

The Ukrainian government on Friday imposed sanctions on the ruble, forcing Mr. Chobanian to halt crypto-to-Russian currency swaps.

“But who cares when it’s war?” Mr. Chobanian said.

His platform has seen a steady increase in business from Ukrainian accounts in recent weeks.

Worried about rising tensions, locals bought stablecoins, dollar-backed cryptocurrencies often criticized by Western regulators for their lackluster.

“Bitcoin, you get into gambling, you don’t know if it will go up or down,” he explained.

“But here, you’re trying to preserve what you have and people see the US dollar as a safe haven. Cash is useless, there’s not much you can do with it, it could be easy. easily taken with a gun. USDT (stablecoin) is a safe haven.”

But trading has become increasingly difficult since the invasion.

Punishment

“There’s no limit, it can be raised from all over the world, it’s not dependent on the banking system, it’s more transparent because it’s a blockchain. It’s a better option,” said Mr. Chobanian. speak.

This enthusiasm is not entirely shared by the Ukrainian government.

On the UkraineNOW media site, the Ministry of Defense called for donations via bank transfer, but indicated that “national law does not allow the Ministry of Defense of Ukraine to use other payment systems (‘Webmoney’, ‘” Bitcoin’, ‘PayPal” “, Etc.).”

And the same decentralized network that makes cryptocurrencies so attractive to Ukrainian fundraisers could also benefit Russia.

Among the sanctions being considered against Moscow is its exclusion from the Swift system, which enables interbank payments between financial institutions around the world.

Some fear that cryptocurrencies could allow Russia to bypass such sanctions.

“North Korea has been conducting aggressive hacking attempts with the intention of stealing crypto from exchanges and DeFi platforms,” explains Caroline Malcolm from analytics firm Chainalysis.

“They were able to bring in billions of dollars worth of money to the country, evading sanctions.”

Iran has also used cryptocurrency to bring money into the country, but mined it instead of hacking it, she added.

But as with the traditional financial system, “the crypto ecosystem can put in place measures to identify transactions from identified sanctioned entities,” she said.

This can mainly be achieved by analyzing data from blockchains – registers where all cryptocurrency transactions are recorded.



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