Russia delivers a violent setback to Crypto
Barely a week goes by without the young crypto industry getting bad news.
The industry is currently playing a guessing game that consists of trying to guess which crypto company or crypto platform will next be affected by the liquidity crisis affecting prominent crypto borrowers such as Celsius Network, Voyager Digital and BlockFi.
This cash crunch crisis comes from the fall in cryptocurrency prices that led to a collapse of more than $ 2 trillion in the crypto market since November. The damage is significant. Celsius and Voyager have filed for Chapter 11 bankruptcy and their customers do not even know if they will be able to get their money back.
Other platforms such as Babel Finance, CoinLoan or CoinFlex have suspended withdrawals, thus preventing their customers from accessing their money. BlockFi was rescued by the cryptocurrency exchange FTX.com.
Another difficulty for the sector is how to bring back retail investors, many of whom fled the crypto sector after suffering colossal losses? Some investors even lost everything after the crash of the sister token Luna and UST in May. Three Arrows Capital, also known as 3AC, a crypto hedge fund was forced to liquidate.
As if that were not enough, there has just been bad news from Russia. In fact, President Vladimir Putin has just signed a stricter law against cryptocurrencies after it was passed by the Russian National Assembly or the Duma on July 8.
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This law prohibited any payment for assets, goods, products and services by digital means or other tools. It is the latest legal arsenal used by Moscow to prevent the use of cryptocurrencies as a means of payment.
Crypto and sanctions
Finance Minister Anton Siluanov had presented a draft digital currency to parliament to regulate the sector in February.
However, the Russian government did not follow the recommendation of the Central Bank of Russia, which in March called for a direct ban on cryptocurrencies and the entire crypto industry in the country. The institution recommended a ban on trade, mining and payment for goods and services with cryptocurrency.
The Russian War in Ukraine can play a big role here. In the face of NATO sanctions, there has been a wave of interest in how Russia can use cryptocurrencies to circumvent sanctions. Selected Russian banks were disconnected from SWIFT, a secure messaging system used by financial institutions, brokers and investment firms.
Russia’s economy has suffered from sanctions with the ruble’s value plummeting.
According to government figures, Russian citizens’ cryptocurrencies are estimated at about $ 2 trillion, or nearly $ 26 billion.
The crypto industry, for its part, has raised tens of millions of dollars for Ukraine and Ukrainians invaded by Russia.
