October 1, 2022

Russians In Diaspora Liquidate Crypto Assets In A Bid To Evade Sanctions

Most Russian business owners in diasporas have suffered heavily, due to the sanctions meted out by the European Union and other countries. A lot of them have now turned to other means of evading these current harsh situations by liquidating their cryptocurrency assets in poorly crypto-regulated countries.

Crypto firms in the UAE are being flooded with requests from these big Russian business people, to liquidate billions of dollars of digital currencies as they seek a safe haven for their fortunes.

Many of these ‘Russian Billionaires’ have now turned to real estate investments in the United Arab Emirates. They liquidate their assets and invest them in real estate businesses that will yield real income over a few years. Others only have intentions of turning their cryptocurrency assets to hard currencies in order to stash them in hidden places.

One firm has received thousands of queries from Swiss brokers who are asking to liquidate billions of dollars worth of Bitcoin because their Russian clients are afraid that Switzerland will freeze all their assets. An executive of this crypto firm, said that none of the requests have been less than $2 billion.

The executive mentioned that things have never been this busy in the firm. He went on to say one broker offered to sell off 125,000 Bitcoin which is equivalent to $6 billion. Furthermore, Switzerland’s financial market supervisor refused to comment on the volume of crypto transactions it is handling.

Is This Truly A Way Out Of Sanctions?

Al Jazeera reports confirm that Russians are buying properties in Dubai, using cryptocurrencies as a covering to protect them from the weight of the sanctions, while they liquidate their assets and invest in Gulf states.

A lot of cryptocurrency platforms have decided to also block the accounts of Russians who have been sanctioned by the West over their government’s invasion of Ukraine. Top crypto exchange platforms have come out to state that they are partnering with law enforcement agencies to ensure that cryptocurrencies are not used as vehicles to evade sanctions. Even trading bots may soon stop trading Russian accounts due to this development.

Furthermore, some Western diplomats have expressed shock at the number of Russians that have begun to seek refugee in the UAE. The diplomats worry that some of these Russians could be acting on behalf of those that are sanctioned.

The western diplomats concluded by saying that they hope the authorities of UAE are aware of the implications of this sanction evading activities and will take decisive actions towards it.

Consequently, the UAE have now found themselves on a ‘gray list’ to be monitored better by the financial crimes and money laundering watchdog, The Financial Action Task Force (FATF).

The FATF has already started setting up parameters on certain sectors. Real estate and precious metals are on top of their list of sectors to keep a Hawkeye on. 

Tagging It Self-protection?

They are basically trying to protect themselves from inflation” according to Apurv Trivedi of Healy Consultants which advices on setting up businesses, including crypto services.  He went further to say that they are trying to manage the risk they are facing from the inflationary pressures. He described their turning to crypto as their best opinion. 

Another consultant from Healy Consultants also mentioned that a lot of the money now coming from Russia is being heavily invested in Dubai’s real estate. 

Will the Russians succeed with using cryptocurrency to evade sanctions? Time will tell.

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