Neutral Switzerland may target crypto assets held by sanctioned Russian businesses on its territory, according to a report. According to the article, the measure is intended to safeguard the country’s cryptocurrency industry’s integrity. However, the source cautions that crypto-assets not kept on cryptocurrency exchanges are virtually impossible to target.
Protecting the Swiss Crypto Industry’s Integrity
Switzerland’s typically impartial government official stated that the country may “target” all crypto asset service providers within its borders that are owned by Russians, as well as all businesses sanctioned by the European Union. To do this, the non-EU country’s Federal Council stated that it will amend its sanctions regulations to include prohibitions against cryptocurrency.
According to an unidentified finance ministry official, denying Russian digital currency holders access to their crypto assets also helps to “defend the integrity” of Switzerland’s cryptocurrency business.
Switzerland, whose financial institutions are being investigated for allegedly concealing Russian oligarchs’ assets, has already approved the EU’s harsh sanctions against Russia. Despite the introduction of sanctions, certain lawmakers and officials in the United States and Europe have raised concern over sanctioned Russians’ potential use of crypto assets to circumvent sanctions.
Additionally, before to Russia’s military foray into Ukraine, critics of crypto assets frequently asserted that the digital assets are utilised by criminals and money launderers.
Not Your Cryptography, Not Your Keys
While the Swiss finance ministry source featured in the Financial Times (FT) piece justified the move to target Russian digital asset users, the official cautions that freezing crypto assets kept on a decentralised platform is nearly impossible. The official stated as follows:
If someone keeps their crypto key on their person, it is practically hard to identify them regardless of where they are. However, if they are utilising crypto services – funds, exchanges, and so forth — we can target these service points.
According to the official, the government can lock off sanctioned crypto-assets holders only when they use service points such as exchanges and money.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.