By Evan Spicer
Russian President Vladimir Putin’s invasion of Ukraine sent shockwaves globally and prompted the United States, the European Union, the United Kingdom, Canada, and a number of other countries to immediately impose sanctions against Russia. Although this strategy is seen as a major deterrent and an alternative to deploying NATO troops, sanctions may be losing their power in the cryptocurrency era.
According to crypto investigators at MyChargeBack, there has been an uptick in complaints since the conflict began and it is likely that many of these frauds will be traced to Russia.
“Putin and the sanctioned Russian oligarchs have many strategies at their disposal,” noted Michael B. Cohen, MyChargeBack’s Vice President of Global Operations. “f they are concerned about huge transactions on the blockchain raising red flags, they could use their copious energy resources for crypto mining. Also, it would not be surprising if they support efforts at hacking of bitcoin wallets and ransomware attacks to obtain more cryptocurrency.”
Putin’s Allies May Get Caught on the Blockchain, But That Won’t Be the End of the Story
The blockchain may seem like a hazardous place with anonymous bitcoin wallets and location and identities disguised behind codes, but law enforcement in the UK, the U.S. and Europe have been successful recently at tracking down crypto crime, despite anonymity.
The installation of a new crypto unit at the FBI, the recent seizure of $3.6 billion worth of bitcoin from a Wall Street scandal and millions worth of NFTs recovered by HMRC in a UK tax evasion scheme all demonstrate how authorities are on the trail of crypto fraud.
According to a Forbes article, many experts are confident that they can thwart any efforts by Russia to use the blockchain as a safe haven to evade sanctions. First, they point out that Russia started the war with fewer crypto assets than Iran and Venezuela. The Russian government held a large amount of dollars and rubles, and with the ruble severely devalued, the sudden rush to buy cryptocurrencies would not only be expensive, but easily detected.
Any platform would be on the alert if it observed huge purchases of or expenditures in cryptocurrency coming from a single source, and, according to one widely-held theory, it would be nearly impossible for Russia to avoid detection.
However, this scenario does not consider the potential power of Russia to mine cryptocurrency and commit mass hacking and theft from accounts belonging to others.
The Iran Model: Russia Could Crypto Mine Its Way Past Sanctions
One way Iran has gotten around its sanctions is to use its sizable energy resources to mine cryptocurrency. Russia could follow this model, and instead of selling fuel to its adversaries in the West, it could commit these fuel supplies to making virtual money.
Although an article in Al Jazeera casts doubt on the potential of Russia to mine enough cryptocurrency to compensate for losses due to sanctions, it is clear that Putin can at least mitigate the financial pain and blunt the effect of the West’s suspension of monetary ties.
Hacking and Stealing Bitcoin Wallets
If large-scale government transactions would be too noticeable on the blockchain and if Russia does not have the means to purchase cryptocurrency, given the severely depressed ruble, hacking theft and ransomware could be useful tactics to secure cryptocurrency.
It is not far-fetched to envision the mobilization of decentralized, government-backed hackers who could penetrate bitcoin wallets and gain access to funds or demand codes through ransomware attacks that threaten utilities, companies and individuals.
Since the invasion of Ukraine was initiated by Putin, it is reasonable to assume that he had a plan in place, before assembling troops at the border, to survive or perhaps even thrive if the West made the predictable move of imposing sanctions. This plan may involve cryptocurrency.
The Central Role of Crypto Investigation
In an increasingly unstable global backdrop, crypto investigation is more essential than ever. Cryptocurrency owners should be on the alert for any account irregularities and report unauthorized transactions. MyChargeBack is at the forefront of crypto trace innovation and can track wallets and uncover identities on the blockchain.
If you have lost money to a cryptocurrency scheme, seek fund recovery assistance right away. Consult with MyChargeBack experts and get started with your fund recovery claim. We have extensive knowledge and working relationships with regulators and more than 450 law enforcement agencies around the world, as well as the solutions that can improve your prospects of getting your cryptocurrency back.