Siding with Ukraine War & Russian Sanctions, Is Crypto Still Neutral?
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Cryptocurrency by its very design was intended to be neutral. It was not a currency beholden to a sovereign state. But has the tension between its use in the Ukraine War and amidst Russian sanctions, can it remain neutral?
WHOSE SIDE IS cryptocurrency on? If you had asked Satoshi Nakamoto, the pseudonymous person (or persons) who created the Bitcoin platform in 2008, he/they likely would have rejected the question. The whole point of cryptocurrencies like bitcoin was neutrality—the fact that no government, bank, or entity could prevent you from using it, whether you were paying for a pizza, a forbidden book, or a bag of cocaine.
That, of course, started changing as soon as crypto’s value made it the perfect medium for criminal transactions, from ransomware to dark net marketplaces. Regulators around the world demanded that exchanges and other “off-ramps” blacklist cryptocurrency from accounts linked to criminal activities or individuals, despite illicit trades accounting for just 0.15 percent of global crypto movements in 2021.
But Russia’s invasion of Ukraine is a different matter. Crypto’s nature as borderless money, and the abundance of youngish, passionate people sitting on troves of crypto-millions made it a go-to method for Ukraine to raise funds from people outraged by Moscow’s actions. At the same time there were fears that government officials and Russian president Vladimir Putin’s moneyed inner circle might side-step western sanctions by moving their assets into crypto.
Cryptocurrency exchanges are reportedly blocking all transactions from accounts known to be linked to sanctioned individuals.
Reminder: Ethereum is neutral, but I am not.
— vitalik.eth (@VitalikButerin) February 24, 2022
In under two weeks—as Western internet and tech companies moved out or were shoved out of Russia—the global internet and the Russian internet have already transformed into two different realms. Crypto is one of the few threads that still stretches across that divide. But as time goes by without a solution, it will increasingly become a battleground, and its companies and actors will be asked to take a stance. In spite of Nakamoto’s vision, neutrality might soon not be an option anymore. As Vitalik Buterin himself put it after a Twitter denunciation of Putin, “Reminder: Ethereum is neutral, but I am not.”
