The Federation Tower in Moscow is known to cybercriminals from all over the world. The skyscraper can certainly be described as an Eldorado for criminals. The reason: Russian cryptocurrency companies can “turn over” large fortunes there without official identification. Bitcoin & Co. thus represent the bridge between the unregulated financial system, which is characterized by many criminal activities, and the internationally regulated dollar financial system.
Right now, this system represents a loophole for many Russians against Western sanctions to protect their wealth. “Bitcoin could be a potential safe haven for Russian oligarchs to avoid sanctions as there is no censor on the bitcoin network and cryptocurrency deals,” said Ipek Ozkardeskaya, an analyst at Swissquote Bank.
To combat this cybercrime, some politicians have urged crypto exchanges to ban any Russian IP addresses from making payments. US Senator Elizabeth Warren even presented a bill in this regard. The problem: Numerous trading platforms such as Kraken, Coinbase and Binance reject this.
Technically, it would also be possible to trace IP addresses and their users. Contrary to many assumptions, crypto transactions are not always anonymous. “The larger the amounts, the less possible anonymous transactions are. This is a desired result of the regulation in recent years,” emphasized Philipp Sandner, head of the Blockchain Center at the Frankfurt School of Finance.
In practice, crypto transactions can hardly be monitored or even prevented due to the decentralization – even if the identity of the user is known. This is also the reason why crime in this area is correspondingly high.