INTERNATIONAL ECONOMIC SANCTIONS AGAINST THE RUSSIAN FEDERATION AND CRYPTOCURRENCIES: LEGAL ASSESSMENT

Abstract

Purpose of the article is to assess legal possibilities of using cryptocurrencies by the Russian Federation in order to evade international economic sanctions and formulate appropriate proposals.Research methods.The paper is executed by applying the general research and special methods of scientific cognition.Results.The article is devoted to the legal assessment of the possibilities of using cryptocurrencies by the Russian Federation in order to evade international economic sanctions with further substantiation of relevant proposals.It is proved that the cryptocurrency market cannot fully replace classical financial mechanisms for the Russian Federation, as the aggressor country.Therefore, we can talk about individual cases of withdrawal by residents of the Russian Federation of their own assets out of sanctions in the form of cryptocurrency with their subsequent conversion into fiat currencies.It is noted that legal operators of the virtual assets market, as well as professional participants involved in the chain of transactions with virtual assets, carry out their activities in accordance with the requirements of FATF and national legislation on prevention of funds laundering and combating terrorism.At the same time, it is established that the use of decentralized cryptocurrency exchange (DEX) and technologies increasing the anonymity of transactions (in particular, bitcoin mixer (tumbler), private, decentralized cryptocurrency (Monero), shadow banking), creates grounds to evade the norms of prevention and counteraction money laundering, terrorist financing and financing of the proliferation of weapons of mass destruction, and negate the effect of international economic sanctions.Conclusions.International initiatives regarding the legal regulation of stablecoins create risks for the Decentralized Finance industry and for using the decentralized crypto-asset market for fraud, including circumventing sanctions, but, at the same time, do not fully mitigate the risks associated with the circulation of stablecoins.Accordingly, the arguments in favor of taking appropriate international legal measures aimed at combating shadow banking and organizing the circulation of virtual assets are expressed.Thus, only cryptocurrencies, which are secured by currency values, securities or derivative financial instruments at the moment of their introduction and during the whole period of their stay in circulation, should be subject to conversion into fiat currencies.