Key Russian figures and financial institutions have been placed on a U.S. sanctions list, and key Russian banks have been removed from the SWIFT interbank system. As a result, the value of a Russian ruble has plunged, which raises the question: can crypto be used by Russia to avoid sanctions?

As you know, every crypto transaction is written to a publicly viewable distributed ledger called a blockchain. Want to check out every transaction on the bitcoin (BTC) blockchain, as well as every transaction on 18 other popular blockchains? Visit blockchair.com. All of the information is public. Contrary to popular mythology, crypto transactions are impossible to hide. While it’s true that the identity of a wallet owner is not generally public information, there are several analytics firms that specialize in understanding who owns the biggest wallets.

That said, it is exceptionally hard to move large amounts of crypto without calling attention to your wallet. And, as you know, centralized exchanges (i.e. Coinbase, Kraken, Binance, FTX, etc.) all have some version of a KYC (know your customer) protocol in place. So, in this respect, centralized crypto exchanges are legally similar to banks.

To back up this point, Coinbase CEO Brian Armstrong tweeted, “So it would be a mistake to think crypto businesses like Coinbase won’t follow the law. Of course we will. This is why we screen people who sign up for our services against global watchlists, and block transactions from IP addresses that might belong to sanctioned individuals or entities, just like any other regulated financial services business.”

Lastly, there is no data to back up the concern that there is any large-scale use of crypto to avoid sanctions. Most crypto markets lack the required liquidity to move very large amounts of money.

As you can see on the various blockchains, there are people doing ruble-to-stablecoin and ruble-to-BTC transactions – lots of them, actually – and transaction volume is robust across the crypto markets, but it doesn’t look like crypto is a safe haven for tainted or sanctioned money. How do we know? Unlike fiat currency banking transactions, all crypto transactions are all public, and you can be certain that every one of them is being carefully watched.