ECB reiterates that Russia could still be using crypto trading to evade sanctions

Christine Lagarde, the European Central Bank president, has once again issued a warning that businesses and individuals in Russia are using digital assets to evade sanctions.

On the contrary, the data from Chainalysis reveals that as of March 18, the crypto trading volume for daily ruble has been around $7.4 million, down by around 90% from the peak of $70 million on March 7.

This amount is a fraction of the whole international crypto market volume, with Bitcoin’s total daily volume ranging between $20 billion and $40 billion.

On Tuesday, the crypto skeptic Lagarde remarked that “volumes of rubles stable, into cryptos, at the moment is at the highest level that we have seen since maybe 2021” during a talk at the Bank for International Settlements Innovation Summit.

Lagarde did not blame the government of Russia, instead stating that it was mostly Russian citizens and enterprises that were adopting cryptocurrency. 

“So is it a threat? Yes. Has it … been a threat in the past? Yes, because when you look at a lot of the dubious transactions that are taking place, a lot of the criminal activities payments that are taking place, very often you find some crypto assets.”

Is Russia really using crypto to evade sanctions?

Lagarde’s views appear to be in conflict with Chainalysis and Kaiko’s data, as well as expert opinion. According to Jake Chervinsky of the Blockchain Association, Russia is unlikely to use crypto assets to get over Western sanctions.

According to data from crypto monitoring firm Kaiko, the volume of the ruble to USDT has dropped by 86% from a high of $38 million on March 7 to less than $5 million on March 22. There was a spike in the weeks leading up to the war and a subsequent spike, but volumes are now back to levels observed throughout most of early February. That was prior to the imposition of sanctions on Russia.

On the other hand, cryptocurrency is helping Ukraine and its migrants in leaving the nation. CNBC reported on a Ukrainian immigrant known only by the pseudonym “Fadey” who escaped the country with $2000 in Bitcoin stored in a cold wallet, making it significantly easier for him to access his funds after he arrived in Poland.