If the latest reports are to be believed, Russians are using cryptocurrency to move money out of Russia amid the fear of having their assets frozen. Affluent Russians have been found to be purchasing property in other parts of the world, especially in global cities such as Dubai. This shows that cryptocurrencies are being used by Russians, especially the rich, to overcome the challenges created by sanctions. If you are interested in bitcoin mining sign up here.
The surge in Crypto Liquidating Requests
Crypto companies in the United Arab Emirates (UAE) are receiving requests to convert billions of dollars worth of digital currencies into fiat currency. These investors are seeking to turn their virtual money into hard currency for moving elsewhere. Many are transforming their crypto holdings into real estate in the kingdom.
The requests are being channeled from different parts of the world, often indirectly by the brokers of the affluent Russians. For example, a crypto company in UAE has received multiple queries over the past week from Swiss brokers seeking to liquidate billions of dollars worth of Bitcoin. These investors no longer have faith in the Swiss system due to fears of their assets being frozen there. It is worth noting that all these requests were for Bitcoin holdings of at least $2 billion.
Is Switzerland No Longer Safe for Russian Assets?
According to Switzerland’s Economic Affairs Secretariat (SECO), crypto assets would be treated the same way as other assets in terms of the sanctions laid out on Russian assets and individuals. If any Russian oligarch or other individual is sanctioned, their crypto assets in Switzerland will also be sanctioned.
Interestingly, Dubai, one of the world’s major business and financial hubs, seems to have remained uninfluenced by the West’s sanctions on Russia and its rich. UAE has refused to take sides in the Russia-Ukraine conflict and this has sent a strong signal to Russians that their money could be safe in this Middle Eastern country.
UAE as a Safe Haven for Converting Russian-Held Crypto Assets
Several real estate brokers here have partnered with crypto services in order to assist people to purchase properties in UAE. These brokers have reported the influx of requests, not just from Russians but also from Belarusians. Many crypto firms here have reported receiving over half a dozen requests per week for liquidating cryptos worth over $2 billion. Before the Ukraine-Russia conflict began, they were receiving no more than a single such request per week.
One such recent request received through a broker involved $6 billion worth of Bitcoin. The liquidated money was set for investment in some Australian companies.
Is Crypto Actually Helping Russians Break Out of Sanctions?
According to other financial sources in the UAE, Russians are purchasing properties in Dubai with the help of their crypto assets. They are using this method to get their funds out of other places in the world and channel the money into the Gulf nation.
Other the other hand, major crypto located in the West are making announcements about them blocking accounts of Russians. However, none of them has released any details about their activities. These exchanges are claiming that they have already put processes into place to prevent the use of crypto as a way to evade sanctions. They are also said to be collaborating with law enforcement.
Western Lawmakers & Diplomats Raise Concerns
Cryptocurrency is designed to provide the utmost level of anonymity to users. Still, many EU nations have called for even more stringent oversight to eliminate any loopholes to prevent sanctioned Russians from evading the financial curbs. Many Western diplomats raised alarm over the number of Russians who flocked to seek refuge in the UAE for their assets. They also claimed that many of these individuals could be acting on behalf of third parties that are under sanctions.
There is also skepticism about the UAE taking any actions against Russian assets to adhere to the Western sanctions. The West has in fact taken action against the country through the Financial Action Task Force (FATF). UAE was placed in the FATF’s Grey List this month. The reason cited was the increased risk in specific sectors such as real estate and precious metals brokering. In response, the country has adopted a new digital assets law and has created a regulatory agency.
Given these developments, it seems that cryptocurrency can in some ways help investors overcome the sanctions laid down by multiple governments.