ECB’s Lagarde Says Crypto Exchanges May Be “Accomplices” to Sanctions Evasion Amid Calls for Blocking All Russian Accounts


The president of the European Central Bank, Christine Lagarde, is urging trading platforms to clamp down on individuals who are using cryptocurrencies to sidestep sanctions, and warned they risk becoming “accomplices” to individuals evading sanctions.

Lagarde, speaking at the Bank for International Settlements Innovation Summit 2022, said in relation to crypto addresses which have been sanctioned:

“We have taken steps to clearly signal to all those who are exchanging, transacting, offering services in relation to crypto assets that they are being accomplices to circumvent sanctions.”


European officials have warned that digital assets can be used to blunt the impact of sanctions imposed on Russia in response to their actions in Ukraine.

Most major crypto exchanges have already confirmed that they are and have for years complied with all sanctions lists and KYC/AML procedures which are forcefully imposed on them by their respective governments.

Chief legal officer Paul Grewal at the largest US exchange Coinbase said the exchange is “committed to complying with sanctions.” Coinbase recently blocked 25,000 Russian-linked crypto addresses.

While most exchanges have confirmed that they are complying with all sanctions, they have also refused to block all Russian users from using their platforms, after calls from Ukraine and some in the mainstream media demanding they do so.

Jesse Powell, CEO of US exchange Kraken, warned their Russian users that they may be legally required to block them soon:

The Canadian regime recently forced exchanges to block anti-mandate protestors accounts and in response to citizens attempting to flee the country, Powell warned that it is possible the Russian government could make a similar request, or the US could force Kraken to block all Russian users and wallets.

Blockchain intelligence firm Elliptic warned there is a “real risk” of sanctions evasions and identified wallets with “significant cryptoasset holdings” worth millions of dollars that “may” be linked to sanctioned individuals. Elliptic’s primary business is selling blockchain analysis services to government agencies, and selling AML compliance services to exchanges.

Many experts are at odds with Elliptic’s claim saying that crypto markets are too small to systematically sidestep sanctions. Drawbacks include lack of liquidity, transparent public ledgers, and lack of fiat off-ramps.

US Senator Elizabeth Warren proposed a bill which has not yet been voted on that would give the White House and Treasury greater powers to clamp down on Russian crypto users, including forcing exchanges to stop processing all transactions involving Russian based users and wallets.

Our in-house analyst Intuit Trading believes that non-transparent ledgers like Monero will likely benefit from loss of fungibility in transparent ledgers due to sanctioned addresses creating “tainted” coins.

He also believes that while lack of liquidity is a problem now, in the future when liquidity is increased crypto may become a more viable method of systematic sanctions evasion.

He also believes when crypto becomes a more accepted method of payment then fiat off-ramps will become less necessary.


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