Despite rising economic sanctions on Russia, the volume of crypto acquired in rubles on leading exchanges tends to decline.
According to data from blockchain-analysis firms, Russian denominated crypto purchases and trading on key exchanges have decreased, putting to rest ideas that the country will turn to digital assets to evade sanctions.
Some industry insiders ascribed Bitcoin's 15% surge last week to Russians purchasing crypto in the midst of growing economic sanctions. However, data shows that ruble-denominated crypto trade volume was just $34.1 million on March 3, less than half of the recent high of $70.7 million a week ago on Feb. 24.
“Russian volumes have been relatively small so far, suggesting that the price action is more due to investors positioning for an expected uptick in demand from Russia, rather than Russian demand itself,” Citigroup analyst Alexander Saunders told Bloomberg on sanctions-fueled crypto purchases.
Even though experts reject the suggestion that crypto could be used to help Russia avoid economic sanctions, the United States and the European Union continue to strengthen their regulatory oversight over digital assets.
New York recently enhanced its blockchain monitoring capabilities to further restrict the usage of cryptocurrencies or digital assets to assist Russian objectives.
On February 27, New York Governor Kathy Hochul released an executive order instructing state agencies to withdraw from Russian institutions and enterprises, and also entities that assist them. She stated,” New York is proudly home to the nation‘s largest Ukrainian population and we will use our technological assets to protect our people and show Russia that we will hold them accountable.”
Jake Chervinsky, head of policy at the Blockchain Association in the United States, went further to label these concerns about crypto "totally unfounded," showing the different side of the story.
Ari Redbord, the head of legal and government affairs at crypto crime investigator TRM Labs, reflected this viewpoint, saying that it is too late for crypto assets to provide sufficient liquidity for Russia and that the public effect of blockchains is already an adequate detriment for those looking to avoid sanctions.
Several of the world's major crypto exchanges have moved to blacklist sanctioned individuals and organizations in the wake of impending regulatory action from the international community. Binance, on either side, has declined to restrict the accounts of "innocent" Russian users.