Blockchain-analysis businesses have discovered that Russia denominated crypto purchases and trading on key exchanges have fallen, putting a stop to notions that the country will switch to digital assets in order to circumvent Western economic sanctions.

Since the start of the war between Russia and Ukraine, Bitcoin has nearly doubled in value, rising from about $35,000 to nearly $45,000, according to some industry analysts. The spike has been linked to Russians buying cryptocurrencies in order to avoid economic sanctions.

This idea appears to have been proven wrong, as statistics from Chainalysis showed that ruble-denominated crypto trade volume was just $34.1 million on March 3, less than half of a recent peak of $70.7 million a week before, showing a 51.77 percent fall on the day the war was declared.

According to Citigroup analyst Alexander Saunders, speaking to Bloomberg about sanctions-fueled crypto purchases, Russian volumes have been relatively small so far, suggesting that the price action is more due to investors positioning for an expected uptick in demand from Russia, rather than Russian demand itself.

Recently, the state of New York enhanced its blockchain surveillance capabilities in order to further prohibit cryptocurrencies or digital assets from being used to assist Russian goals. On February 27, New York Governor Kathy Hochul signed an executive order instructing state agencies to divest from Russian institutions and enterprises, as well as entities that support them.

To emphasize the other side of the story, Jake Chervinsky, head of policy at the Blockchain Association US, went so far as to say that these concerns about crypto are completely false, explaining in a Twitter thread that Russia cannot and will not utilize crypto to avoid sanctions.

Ari Redbord, the head of legal and government affairs at crypto crime investigator TRM Labs, echoed this sentiment, stating that it is too late for crypto assets to provide enough liquidity for Russia and that the public nature of blockchains is already a sufficient deterrent for those seeking to circumvent sanctions. He claimed that Russia could not use cryptocurrency to replace the hundreds of billions of money that could be restricted or frozen.

Although many specialists are dismissing the notion that cryptocurrency may be used to help Russia avoid economic sanctions, the United States and the European Union are strengthening their regulatory monitoring of digital assets. Many of the world’s most prominent cryptocurrency exchanges have decided to ban sanctioned persons and organizations. Binance, on the other hand, has refused to restrict the accounts of innocent Russian consumers.

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