G7 Kicks Russian Crypto Monitoring Up a Notch

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• The G7 group of countries has promised to prevent sanctioned Russians from cashing out their wealth through crypto
• The group said over the weekend that it would monitor blockchains for activity related to these individuals
• Exchanges in the UAE have been “deluged” with requests to sell massive amounts of bitcoin

The G7 has said that it will increase its observation of cryptocurrency networks in response to claims that wealthy Russians are seeking to cash out their fortunes through crypto. Reuters reported last week that crypto firms in the United Arab Emirates are being “deluged with requests to liquidate billions of dollars” in bitcoin, something that has not gone down well with the G7. In response, the countries released a joint statement over the weekend which reinforced their plans to monitor blockchain activity for any such attempts and punish those that try.

G7 Will “Impose Costs” on Sanctioned Russian Crypto Users

Cryptocurrency has come to the fore during Russia’s invasion of Ukraine, with immediate concerns that sanctioned Russians would use Bitcoin and other cryptocurrencies to turn their holdings into cash. While those in the space denied that this would be possible on a large scale, it was inevitable that some would try.

This has proved to be the case, with Reuters reporting that one individual wanted to cash out a staggering ₿125,000 worth $6 billion. Of course, cryptocurrency markets cannot absorb this kind of selling and maintain the same price, but the news that they are trying has caused the G7 to act.

The group’s statement said that the countries would “ensure that the Russian state and elites, proxies and oligarchs cannot leverage digital assets as a means of evading or offsetting the impact of international sanctions” and that “we will impose costs on illicit Russian actors using digital assets to enhance and transfer their wealth, consistent with our national processes.”

Japan and U.S. Also Taking Steps

These sentiments have been echoed by Japan, which today ordered crypto exchanges not to process transactions involving cryptocurrencies subject to asset-freeze sanctions against Russia and Belarus over the war in Ukraine.

This move itself followed new guidance issued by the U.S. Treasury Department on Friday which required U.S.-based cryptocurrency firms not to engage in transactions with sanction targets.