ECB Chief: Cryptocurrencies Are ‘Certainly’ Being Used to Circumvent Russian Sanctions

The European Central Bank (ECB) warns cryptocurrencies are being used to evade sanctions by Russians. ECB President Christine Lagarde warns crypto firms against becoming “accomplices” in the crime.

Christine Lagarde, president of the European Central Bank (ECB), said Tuesday at the Bank for International Settlements (BIS) Innovation Summit that cryptocurrencies are “certainly” being used by Russian firms and individuals to bypass sanctions. A growing number of countries have levied heavy sanctions against Russian entities after Russia began its invasion of Ukraine.

Expressing concerns over crypto’s continued use, the ECB chief said:

They are certainly being used as a way to try to circumvent the sanctions that have been decided by many countries around the world against Russia.

“A specific number of players, either individuals or corporates, are obviously trying to convert their rubles into crypto assets,” she added, noting that there are rising volumes of transactions going from the ruble to stablecoins and from stablecoins to other digital assets.

The ECB president proceeded to warn crypto firms against becoming accomplices in the crime, stating that in Europe:

We have taken steps to clearly signal to all those who are exchanging, transacting, offering services in relation to crypto assets that they are being accomplices to circumvent sanctions.

While Lagarde is certain about cryptocurrency being used to evade Russian sanctions, many experts have said that crypto is not an effective tool for this purpose, including the CEOs of blockchain analytics firm Chainalysis and crypto exchange Coinbase.

In addition, a senior official with the U.S. Treasury Department said last week that cryptocurrency could not be used in a large-scale way to evade sanctions. FBI Director Christopher Wray similarly said that Russia’s ability to circumvent sanctions with cryptocurrency is “highly overestimated.” Carol House, the director of cybersecurity for the National Security Council, also said that crypto is an ineffective tool for circumventing sanctions.

However, Lagarde is not the only one who is worried about cryptocurrency being used to bypass sanctions. In the U.S., Senator Elizabeth Warren is deeply concerned; she introduced a crypto sanctions compliance bill last week that has been described by an industry expert as “unnecessary, overbroad, and unconstitutional.”

What do you think about ECB Chief Christine Lagarde’s warning? Let us know in the comments section below.