Western Countries Fear that Russia Could Evade Economic Sanctions Through Crypto - but Is This True?
Russia started a war, and the world rallied together in a unified voice to rebuke them strongly. The US and the EU responded with tough economic sanctions targeted at crippling the Russian economy and isolating it from global commerce. These sanctions started taking effect with the Russian ruble hitting an all-time low, crude oil hitting high price points, inflation disrupting the economic flow, etc.
As the devastating effect on Russia's economy continues, the United States Financial Crimes Enforcement Network (FinCEN) raised the alarm to financial institutions on the possibility of Russia evading economic sanctions through digital assets. While the speculation of Russia evading through cryptocurrencies continues, it has been termed ”impracticable” by financial experts. Due to the transparent nature of blockchain, it will be difficult to remain under the radar while moving the amount of cash needed to keep the Russian economy running via crypto. Therefore, the idea of Russia dodging sanctions using cryptocurrency has no teeth. Still, FinCEN encourages financial institutions to watch out and report suspicious activities by Russians and Belarusians.
Russia is currently running out of options as they've been cut off from major global systems like SWIFT, with many of their Oligarchs and top banks blacklisted and closely monitored. This shortage of options spooked lawmakers to show concerns over cryptocurrency being a way out for the Kremlin. The world is still watching to see if Russia will seize its attack on Ukraine because of the devastating effects of the sanctions. Still, Russia has so far maintained its course to overpower Ukraine in what they called “a special military operation.”
Joe Biden Authorized Executive Order on Crypto Regulation
In the wake of Russia's invasion of Ukraine and the US-EU’s tough economic sanctions on Russia, fears have bubbled up to suggest Russia could use cryptocurrencies to evade sanctions. This speculation has jolted the Treasury department and US lawmakers to move for regulation on cryptocurrency to curb any potential evasion.
The office of the US president has given an executive order on crypto regulation, which has been signed by the president, Joe Biden. While many feared this regulation would amplify a regulatory clampdown on the crypto market, the tone of the executive order seems favorable, focusing majorly on coordination and consolidation within a unified national policy.
The executive order highlighted six major areas the federal government will get involved in within the crypto ecosystem: financial inclusion, responsible innovation, financial stability, consumer and investor protection, combating illicit financial activities, and the US' global financial leadership. The order also assigned agencies to oversee and enforce the segment.
Overall, the order gives positive feedback to cryptocurrency adoption and urges necessary bodies within the US government to increase the country's competitiveness within the digital asset market.
Ukraine's Crypto Donation Tops $108M as Bored Ape Join the List
Ukraine has been experiencing unjustified aggression and invasion from Russia. Thousands of lives and properties have been lost and destroyed, with many injured in the ongoing aggression.
In response to Russia's aggression, the United States, the European Union, and thousands of individuals and corporations have united to support Ukraine in the fight against Russia.
The Ukrainian government opened official Bitcoin and Ethereum wallets to accept financial support from the world, and shortly after, thousands and millions of dollars started pouring in.
The creators of the Bored Ape Yacht Club also joined the train of donors by donating $1million in relief funds to the country's wallet. A recent tracker placed on the crypto funds in all the government's accounts shows over $108M in crypto has been donated so far.
Thailand to Exempt Crypto Traders on Registered Exchanges from 7% Tax
What effort has your country made to encourage crypto adoption? While some can't relate because of strict bans on cryptocurrencies by their governments, others like Thailand are somewhat relaxed at the government's effort to bolster crypto growth and overall economic bliss.
The finance ministry of Thailand has reportedly announced a new tax policy that exempts crypto traders from the Value-added tax (VAT) placed on authorized crypto exchanges, which amounts to 7%. The new tax policy also promises a ten years tax exemption for investors who would like to invest in crypto startups within the country. The new tax policy will kick in April 2022 and last through December 2023.
Thailand's finance minister, Arkhom Termpittayapaisith, announced that the revised policy is the government's effort to encourage investments and the growth of digital assets within the second-largest economy in South East Asia.
190 Mining Machines Seized in Chinese Police Raid
You should already know what China's stand on cryptocurrency is. But if you don't, here's a reminder. Having banned cryptocurrencies many times, China engages with blockchain technology in an opportunistic approach. They are actively pursuing its deployment in all areas, including their own CBDC, as long as they can fully control it.
China once accounted for over 60% of the world's hash rate, and since its ban, many miners and mining farms have had to shut down, relocate, or go into hiding. Police inspection and raids have been frequent within the country to enforce the ban, and the most recent bust happened in the city of Guangzhou.
The Guangdong province's Development and Reform Commission recently busted a crypto mining farm with 190 pieces of mining equipment, operating covertly in an electric motor charging station. The police disclosed the mining operation was under the radar because of the high energy consumption of the charging station that shielded its energy consumption — and it wasn't until they reviewed the station's energy consumption that they found discrepancies.
The seized mining equipment is reportedly worth around 5 million yuan ($790,614), and the mining farm worked for over 1,000 hours and consumed over 90,000 kWh of electricity.
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