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Russian Oligarchs Turn To Crypto To Skirt Sanctions

Faced with a $32 billion drop in their wealth this year, Russian oligarchs are looking for assets to allow them to overcome sanctions that will increase with the invasion of Ukraine. Familiar with crises, they see bitcoin and other cryptocurrencies as an escape from the hegemony of the dollar, and a way to diversify their holdings.

Vivid's app is seen on a display of an iPhone while the candlestick chart of a cryptocurrency is shown on a monitor in the background

Holding crypto allows oligarchs to escape seizures of their assets abroad

Nessim Aït-Kacimi

With the European Union and the United States delivering the harshest ever sanctions on Russia following the invasion of Ukraine, ultra-wealthy Russians are turning to new tech to preserve their financial assets. Cryptocurrencies, such as bitcoin (circa $32,000) and ethereum (circa $2,470) can be seen, rightly or wrongly, as life savers during financial and geopolitical crises that threaten private assets.

For those close to the Russian power personally targeted by Western sanctions, holding crypto allows them to escape seizures of their assets abroad. And holders have taken care to cover their tracks, as bitcoin is traceable and transparent. Concerned about discretion, Russian investors may prefer cryptos such as monero ($154) that offer anonymity to their users.

Bitcoin boom in Moscow

The U.S. authorities recently demonstrated during the arrest of the couple suspected of laundering the Bitfinex hack that they were gaining momentum in tracking the flow of these new assets. The U.S. Treasury noted in a statement Tuesday that oligarchs under sanctions have used family members to transfer their assets and hide their vast wealth.

The 23 certified Russian billionaires still hold assets estimated at $343 billion.

Earlier this month, the Russian government estimated that its citizens held $214 billion worth of crypto, or around 12% of the global total. Among these holders are the mighty fortunes of Russian oligarchs. Their diversified wealth (stocks, real estate) has decreased by $32 billion this year according to the billionaires indices compiled by Bloomberg.

Although cryptocurrencies has fallen by 8.5%, it has held up much better than the Moscow Stock Exchange, which has dropped by 23% in 2022. The 23 certified Russian billionaires still hold assets estimated at $343 billion. However, when placed abroad, this money is in the crosshairs of the American authorities.

​New monetary order

Oleg Deripaska

Oleg Deripaska, founder of Basic Element, one of Russia's largest industrial groups.


Just take Oleg Deripaska, the founder of Basic Element, one of Russia's largest industrial groups. Deripaska has been targeted for two years by U.S. sanctions, and last October, he called on the Bank of Russia to embrace cryptocurrencies. Disgruntled, he reacted on the Telegram messaging platform while the Federal Bureau of Investigation conducted raids on his properties in New York and Washington.

Deripaska hoped the global success of cryptos could divert investors from the dollar. He even imagined it would lead the United States to default for a lack of buyers for its debt, resulting in a crash of American currency. On a political level, this would significantly hinder the U.S.’s ability to impose sanctions, which hinges on the dollar being the world’s reserve currency.

Iran and North Korea have both used cryptocurrencies to circumvent Western sanctions; a United Nations report even found that North Korea is funding its nuclear program with cryptocurrency stolen with ransomware.

Already, the Russian government is creating its own central bank electronic currency, a digital ruble, to trade directly with other countries without converting to dollars (China, Russia’s largest trading partner, has also developed its own central bank digital currency.)

A crypto culture

But Russia has only partially met the expectations of its oligarchs. It has not allowed cryptos as a means of payment, according to a bill from the Minister of Finance that was presented earlier this week. Individuals will be able to invest a maximum of $7,700 a year in bitcoin if they pass a test to assess their knowledge of this cryptocurrency. If they fail, they will be able to invest only $650 in the world market leader.

This restrictive approach, which displeases the Russian crypto sector, is likely to be sidestepped, and not just by oligarchs. A broader spectrum of the Russian population is getting interested in these digital assets.

In 2021, the country was ranked 18th out of 154 for its level of cryptocurrency adoption, with individual users, companies and transaction platforms. And in 2020, Russians earned $600 million from their investments in bitcoin, as much as the French, but far behind the Americans ($4.1 billion), according to the annual ranking of Chainalysis.

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FOCUS: Israel-Palestine War

How Biden's Mideast Stance Weakens Israel And Emboldens Iran

The West's decision to pressure Israel over Gaza, and indulge Iran's violent and troublesome regime, follows the U.S. Democrats' line with the Middle East: just keep us out of your murderous affairs.

Photo of demonstration against U.S President Joe Biden in Iran

Demonstration against U.S President Joe Biden in Iran.

Bahram Farrokhi


The Israeli government led by Prime Minister Benjamin Netanyahu is weak both structurally and for its dismal popularity level, which has made it take some contradictory, or erratic, decisions in its war against Hamas in Gaza.

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Other factors influencing its decisions include the pressures of the families of Hamas hostages, and the U.S. administration's lukewarm support for this government and entirely reactive response to the military provocations and "hit-and-run" incidents orchestrated by the Islamic Republic of Iran and its allies, which include Hamas. Israel has also failed to mobilize international opinion behind its war on regional terrorism, in what might be termed a full-blown public relations disaster.

The administration led by President Joe Biden has, by repeating the Democrats' favored, and some might say feeble, policy of appeasing Iran's revolutionary regime, duly nullified the effects of Western sanctions imposed on that regime. By delisting its proxies, the Houthis of Yemen, as terrorists, the administration has allowed them to devote their energies to firing drones and missiles across the Red Sea and even indulging in piracy. The general picture is of a moment of pitiful weakness for the West, in which Iran and other members of the Axis - of Evil or Resistance, take your pick - are daily cocking a snook at the Western powers.

You wonder: how could the United States, given its military and technological resources, fail to spot tankers smuggling out banned Iranian oil through the Persian Gulf to finance the regime's foreign entanglements, while Iran is able to track Israeli-owned ships as far aways as the Indian Ocean? The answer, rather simply, lies in the Biden administration's decision to indulge the ayatollahs and hope for the best.

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