How Do The New EU Sanctions Hurt Crypto Exchanges And Russian Users
The war on Ukraine has caused a domino effect worldwide, affecting nearly everything in the international market. From prices of oil to the rising inflation rates, the current state of the country is leading to various other countries having to make decisions to improve the state of the country as it is.
One of the closest supporters of Ukraine has been the multiple countries of the European Union. And in an effort to curb the brash actions that Russia is taking against Ukraine, they have posed sanctions on the country and its occupied territories.
Since the months that the invasion started, the EU has imposed a number of sanctions, each one with more restrictions than the last. In their latest ones, the EU placed sanctions on Russia surrounding cryptocurrencies.
Why Place Sanctions on Trading Crypto
As Russia continues to make its way into Ukraine’s many cities, the Russian Army is joined by a heavily armed militia group. The Militia is armed as well as the Russian army itself, which is where speculation arose that they were being funded by the Russian Government.
However, after further investigation, it became obvious that the Militia was receiving its funds through anonymous donations through a variety of cryptocurrencies. They were able to generate millions, which allowed them to contribute to the invasion.
As the EU found out about the role that cryptocurrencies are playing in the international landscape, they were quick to add sanctions to it. According to the fine print, no crypto exchanges will be doing business with Russian businesses, individuals, or government officials.
As a result of the sanctions, many Russian customers who were using these international crypto exchanges got the short end of the stick.
Russian Investors Continue to Struggle
Russian investors, compared to investors around the world, seem to be getting a bad deal wherever they look. Investors who were using services like Blockchain.com, Crypto.com, and LocalBitcoins, had to retrieve their assets at sudden notice.
All of these exchanges were on their way out of the country, and investors would not be able to access their assets otherwise. And with all of these customers now having to exit the market at one of its worst times, many of them will be leaving at a loss.
The Firm LocalBitcoins also accounted for 8% of the country’s overall crypto trade volume, and the country also makes up its largest client base. Therefore, both the investors and the exchanges are taking a major loss.
What Can Investors Expect
Investors who are in Russia will have to accept the terms that the EU has so far put forward. There are some alternatives, like channeling the funds through a country where crypto works. However, nothing is set in stone as of yet.