A crypto forensics firm said it has uncovered information on a digital wallet that could be linked to Russian oligarchs and officials facing sanctions.
As Bloomberg News reported Monday (March 14), the wallet has âsignificant crypto-asset holdings,â according to Tom Robinson, co-founder of the forensics company Elliptic.
The firmâs discovery comes as Western nations worry that wealthy Russians â facing sanctions over the countryâs invasion of Ukraine â will use things like bitcoin, tether and privacy-enabling coins to get around these financial penalties.
Last week, the U.S., the European Union, U.K. and Group of Seven, or G7, all issued statements saying that sanctions on Russia applied specifically to crypto.
Meanwhile, Ukrainians and ordinary Russians have turned to crypto as the war impacts their countriesâ banking and payment sectors. Ukraine has also been successfully soliciting millions in cryptocurrencies to support its defenses.
âCrypto can be used for sanctions evasion,â Robinson said. âWhatâs in question is on what kind of scale. Itâs not proving out realistic that oligarchs can completely bypass sanctions by moving all their wealth into crypto. Crypto is highly traceable. Crypto can and will be used for sanctions evasion, but itâs not the silver bullet.â
Learn more: Ukraine War Tests Cryptoâs Ability to Skirt Government Controls
Elliptic said it has identified more than 400 virtual asset services that allow their (typically anonymous) customers to buy crypto with rubles. Last week, activity on these exchanges tripled compared the week before the war began, Robinson said.
The company also connected more than 15 million cryptocurrency addresses to criminal activity tied to Russia and found several hundred thousand crypto addresses tied to sanctioned individuals in Russia and their associates, Robinson said.
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Crypto exchanges such as Binance and Coinbase Global Inc. have said they will abide by the sanctions, but have also said they wonât comply with Ukraineâs request that they stop servicing all Russian customers.
âOrdinary Russians are using crypto as a lifeline now that their currency has collapsed,â Coinbase CEO Brian Armstrong said on Twitter earlier this month. âMany of them likely oppose what their country is doing, and a ban would hurt them, too.â