Ripple CEO Brad Garlinghouse explains why the company is working to avoid global sanctions in the upcoming Ukraine conflict.
Bitcoin has intensified geopolitical tensions between Russia and Ukraine, according to some analysts. There are concerns that Russia could use digital assets to dodge sanctions amid a surge in global bitcoin inflows.
Sanctions on Russia
The Russian Federation has been subject to severe economic sanctions by several Western nations, including a ban on its banks from using the SWIFT international payment system.
Following the government’s rejection of cryptocurrency account outlawing measures, the value of Russian cryptocurrency accounts has skyrocketed. In general, it is about how much damage can be done to the cryptocurrency industry in general if global regulators impose significant penalties on cryptocurrency exchanges for allowing Russians to trade anonymously on their exchanges.
Ripple believes that cryptocurrencies cannot be used to circumvent sanctions
In a recent interview, Brad Garlinghouse, CEO and co-founder of Ripple, explained why Russia cannot use bitcoin to circumvent international sanctions.
In the event of a blacklisted individual circumventing all existing security devices, several financial partners, according to Garlinghouse, risk losing their licenses to do business.
In order to convert crypto to fiat, exchanges/etc rely on banking partners who could lose their licenses if someone on the OFAC list is able to slip through. Extremely stringent KYC/AML policies are in place to avoid precisely this.
— Brad Garlinghouse (@bgarlinghouse) March 2, 2022
According to Garlinghouse, bitcoin exchanges have adopted strict know-your-customer (KYC) and anti-money-laundering standards to prevent such occurrences.
“ RippleNet, for example, has consistently refused to do business with sanctioned institutions or governments,” he explained. “Ripple and our customers are committed to upholding OFAC and KYC/AML regulations.”
According to Garlinghouse, the argument that criminals favor cryptocurrency as a means of laundering money is “outdated and stale”.
Instead of listening to responsible participants who have said they would abide by regulatory restrictions, certain pundits and media outlets present cryptocurrency as the Silk Road, an archaic and outdated argument that doesn’t hold up in today’s world.
Recently, former US presidential candidate Hillary Clinton expressed her discontent with cryptocurrency exchanges for continuing to serve Russian clients.
