Swiss authorities have begun to close the siege against Russian assets in the country. This time, the country is targeting investments in cryptocurrencies based in Swiss territory.
According to Financial Times, the measure targets large billionaires who may want to use cryptocurrencies to circumvent sanctions imposed on the country. With this, the Swiss plan to block cryptocurrencies that are in the possession of these people.
Thus, if Russian citizens use Swiss systems to trade or store cryptocurrencies, the funds may be blocked. However, authorities recognize that they cannot ban all transactions.
“If someone has their own private key, wherever they are, it will be virtually impossible to identify them. But, if they are using cryptocurrency services – funds, exchange – those service points can be targeted,” the FT said.
Switzerland is a historically conflict-neutral country, but that stance changed after the Russian invasion of Ukraine. The country joined the European Union and the United States in imposing financial sanctions against Russians after the war started by President Putin.
Since Vladimir Putin launched his “special military operation” against Ukraine, it turned out to be an all-out war. Then severe measures were applied to restrict Russia and its wealthiest individuals (oligarchs) from accessing financial services and even their own money.
Financial sanctions evolved rapidly and culminated in the exclusion of Russian banks from the Swift payments system. As a result, Russia’s largest bank, Sberbank, declared insolvency because of the amount of withdrawal requests.
In this scenario, cryptocurrencies have also been brought into the mix, as oligarchs can use them to circumvent sanctions. As such, the government of Ukraine has even asked exchanges to stop serving Russia-based customers and even freeze their assets.
These requests were not well received by the companies, and most of them were turned down. Binance, Coinbase and Kraken have so far refused to do so, saying such a move would be contradictory to the nature of cryptocurrencies.
On the other hand, several exchanges in South Korea have started blocking Russian IP addresses. Switzerland adopted a similar stance. In addition to joining the EU in imposing all sanctions against Russia, the country has also gone after Russian cryptocurrencies on its soil.