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FTX CEO talks about the growing crypto activity in Ukraine

By:
on Mar 8, 2022
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  • The CEO of FTX has said that crypto activities in Ukraine have grown due to economic uncertainty.
  • He also noted that Russia could not use crypto to avoid sanctions as transactions were easily traceable.
  • This comes amid growing concerns over Russia avoiding sanctions through digital assets.

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The CEO of FTX, Sam Bankman Fried, has talked about the growing use of cryptocurrencies in countries such as Ukraine and Kazakhstan, whose fiat currencies have been depreciating following the Russian invasion.

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Bankman-Fried noted that citizens in these countries were turning towards crypto to ensure their savings were not affected by the rising inflation levels.

The growing use of cryptocurrencies in Ukraine

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Despite the growing interest of investors based in Ukraine in cryptocurrencies, the market has not been performing well, as volatility has spiked significantly since the beginning of the year.

Bankman-Fried noted that the rise in crypto activities is expected during a period of economic uncertainty. He stated that in Ukraine, people were shifting towards crypto to hedge against the instability of the fiat system. Moreover, crypto activities have also grown due to the humanitarian aid flowing into the country.

So far, more than $50 million worth of cryptocurrencies has been donated to the Ukrainian military and charity organizations based in the country. The Ukrainian government recently said that $15 million of the donated crypto was used to buy military gear for the Ukrainian army.

Crypto activities in Russia

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The executive also talked about the crypto activity in Russia. There have been calls for closer regulatory scrutiny due to speculations that Russia could use digital assets to avoid the sanctions.

However, Bankman-Fried noted that the sanctions imposed against Russia could make it hard for the sanctioned individuals and entities to adopt cryptocurrencies due to blockchain being an open ledger.

Transactions made through the blockchain network are open to the public. This means that if a sanctioned individual tries to purchase cryptocurrencies, the transactions can be traced easily, and if these transactions were happening through an exchange, the exchange could block these accounts.

Concerns over Russia using crypto to avoid sanctions have been echoed by both the US and the European Union. The former first lady of the United States, Hillary Clinton, noted that she was disappointed by the failure of some exchanges to block Russian users. The president of the European central bank also said a comprehensive regulatory framework for digital assets was needed.

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