Christopher Wray pointed to the FBI’s recent work confiscating substantial quantities of cryptocurrency as proof that exploiting digital assets to circumvent sanctions has flaws.
Given the United States’ ability to prevent crypto attempts, Christopher Wray, the director of the Federal Bureau of Investigation, suggested that fiat was a more plausible path for Russia to seek in order to avoid sanctions.
Senator Martin Heinrich of New Mexico asked FBI Director Christopher Wray if Russia would respond to the economic impact of the US barring imports of its oil and gas by utilizing gold reserves, China’s currency, or cryptocurrency in a Senate Select Committee on Intelligence hearing on Thursday. Director Wray claimed that the FBI and its allies had “developed tremendous competence” in digital assets, noting the department’s recent work in seizing massive sums of tokens as proof that crypto could be used to circumvent sanctions.
“The capacity of the Russians to circumvent sanctions using cryptocurrency is certainly greatly overstated by them and others,” Wray added. “We are considerably more effective as a community and with our international allies on that than I believe people realize, and there is a lot of knowledge in terms of tools and techniques to assist prevent that type of activity.” What they truly need is access to some type of fiat currency, which is becoming increasingly difficult.”
Russian President Vladimir Putin, according to Director of National Intelligence Avril Haines, certainly expected sanctions as a result of his activities against Ukraine and built up a reserve fund to mitigate the economic impact. However, she claimed that sanctions imposed by the US Treasury Department and other international governments on Russia had made it difficult to access the funds.
Following Russia’s military activities on February 24, the US and European Union governments announced sanctions aimed at financially damaging the country. Many authorities and departments, including the US Financial Crimes Enforcement Network and the European Commission, have stated that they will investigate whether Russia can use digital currency to avoid sanctions. On Wednesday, US President Joe Biden issued an executive order aiming at establishing a regulatory framework for cryptocurrency, which included a warning about the risks of violating sanctions.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.