Ripple CEO Brad Garlinghouse explained why it would be difficult for Russia to use cryptocurrencies to circumvent sanctions.
Garlinghouse noted that cryptocurrency trading platforms work in partnership with banking organizations, as replenishing deposits requires the ability to accept payments in fiat, and not just in cryptocurrencies. Banking organizations risk losing their licenses if a person on the sanctions list uses their services. In addition, it is to prevent such incidents that cryptocurrency exchanges have introduced a system of verification and identification of users “know your customer” (KYC) and an anti-money laundering policy.
“Exchanges, etc rely on banking partners to convert crypto to fiat, and these partners may lose their licenses if someone on the OFAC list slips through. To prevent this, KYC/AML policies are extremely strict,” Garlinghouse stated.
According to Garlinghouse, the myth that criminals use cryptocurrencies to launder funds is “outdated and tired argument.”
“Instead of listening to responsible players who have been clear they will abide by legal sanctions, some pundits and media insist on continuing to paint crypto as the Silk Road – both an exceptionally outdated and tired argument which simply doesn’t hold true today,” he concluded.
Earlier, former US presidential candidate Hillary Clinton criticized cryptocurrency exchanges for their refusal to stop serving users from Russia, saying she was “disappointed.”