Crypto volumes on major Russian exchanges plummet 50%

Buying and trading of Russian-denominated cryptocurrencies on major exchanges has faltered, data from a blockchain analytics firm showed, disproving theories that Russia will turn to digital assets to circumvent sanctions.

When bitcoin rallied more than 15 percent last week, some industry experts attributed the surge to Russians buying the cryptocurrency in the face of mounting economic sanctions. However, this theory appears to have been proven wrong, as data from Chainalysis showed that ruble-denominated crypto trading volume was only $34.1 million on March 3, around the recent peak of $70.7 million a week earlier on February 24 half of.

Citigroup analyst Alexander Saunders told Bloomberg on sanctions-fueled cryptocurrency purchases that “Russian trading volumes so far have been relatively light, suggesting that the price action is more due to investors preparing for expected Russian demand. preparations for rising, not Russia’s own needs.”

The U.S. and European Union are stepping up regulatory scrutiny of digital assets despite experts denying that cryptocurrencies could be used to help Russia circumvent economic sanctions.

Recently, the state of New York increased its blockchain monitoring capabilities to further prevent cryptocurrencies or digital assets from being used to support Russian interests.

New York Gov. Kathy Hochul issued an executive order on Feb. 27 directing state agencies to divest Russian agencies and companies and entities that support them. she says:

"New York is proud to have the largest Ukrainian population in the nation, and we will use our technological assets to protect our people and show Russia that we will hold them accountable."

Jake Chervinsky, head of policy at the American Blockchain Association, highlighted the other side of the narrative, going so far as to call these concerns about cryptocurrencies “completely unfounded.”

Ari Redbord, head of legal and government affairs at crypto crime investigator TRM Labs, further echoed this sentiment, noting that it was too late for crypto assets to provide Russia with sufficient liquidity, and that the public nature of the blockchain is difficult for those trying to Those who evade sanctions already have a sufficient deterrent effect.

“Russia cannot use cryptocurrencies to replace the hundreds of billions of dollars that could be blocked or frozen.”

In the face of looming regulatory action from the international community, many of the world's leading cryptocurrency exchanges have decided to blacklist sanctioned individuals and organizations. Binance, however, rejected a request to review the accounts of “innocent” Russian customers.