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POLITICIANS PUSH FOR CRYPTO BAN ON RUSSIANS. Several major centralized crypto exchanges including Kraken and Binance have so far declined to disable transfers to all Russian accounts.
The request was made by the Ukrainian government.
Reacting to the news, former Secretary of State and two-time failed Presidential candidate Hillary Clinton said she was disappointed that some “so-called crypto exchanges” were “refusing to end transactions with Russia for some philosophy of libertarianism or whatever.”
Clinton made the comments to opinion host Rachel Maddow on MSNBC.
Following the partial but significant ban of some major Russian banks from the international Swift monetary cross border settlement system, the U.S. and many other nations have been pushing for even tighter financial sanctions and cut-offs for Russia.
Some legislators, including U.S. Senator Elizabeth Warren (D-MA) pushed this past week for crypto regulations that would try to exert more control over crypto transactions, ostensibly to stop Russia from circumventing financial sanctions. Warren stated:
“These sanctions are powerful, but Russia can dodge some of this pain by using the same cryptocurrency tools that are currently used by drug traffickers, cybercriminals, and tax cheats…
“Crypto takes the sting out of sanctions. The whole point of crypto is that it allows someone to conduct financial transactions without having to go through the traditional banking system or traditional financial intermediaries. Right now, millions of transactions are taking place that are completely unregulated with no one verifying who gets what.”
Warren failed to note that fiat money is by far the most common medium of exchange used by criminal enterprises, including massively corrupt government and banking officials.
She also ignored the fact that the vast majority of crypto holders are trying to preserve the value of their labor against inflationary fiat, earn interest that is virtually absent in the current banking system, and/or reduce costs of remittances that are subject to obscene gouging by traditional monetary institutions.
It’s becoming clear that the Russia-Ukraine conflict is offering a convenient opportunity that some do not want to waste, with regard to gaining more control over a sector and a technology that has been disrupting powerful factions of the traditional monetary system.
COVID, J6 and Trudeau’s Emergency Act Use Paved the Way
The financial crackdown on the Truckers Freedom Convoy in Canada, and before that, the cut-offs of January 6 protestors and organizers from their bank accounts, demonstrated how supposed Western democracies are becoming more brazen in wielding financial institutions and mechanisms as weapons.
COVID opened the doors to a kind of dictat style of governance that has seen international and national authorities using cries of “crisis” and “emergency” to trample laws, and indeed, legal order.
The Russia-Ukraine conflict is now ushering in new levels of authoritarian overreach.
The unprecedented political use of Swift has led many in the crypto sector to reaffirm the value of cryptos that were created to decouple money from the kind of control now being wielded in a complex geopolitical crisis.
Michael J. Casey at Coindesk pointed out that despite Clinton’s trivialization, the issue involves quite a bit more than some minor ideological matter:
“It’s all very well for governments to profess support for free speech, but if they prevent citizens from obtaining or sending funds to pay for, say, a computer or for internet access, they effectively deny them that right.”
The Canadian crackdown is stunning, according to Neeraj Agrawal, director of communications at Coin Center, a Washington nonprofit focusing on cryptocurrency policy, who told the Washington Examiner that such steps are seldom seen by Western nations with democratically elected politicians.
According to Agrawal, freedom of expression and financial freedom are linked. Because it is difficult to demonstrate, organize, and speak out without funding, the right to transact is an element of the freedom of expression.
The Canadian government, on the other hand, did not merely target conventional bank accounts and crowdfunding. It also attempted to limit the use of cryptocurrencies, including crackdowns on donors.
Without getting the owner’s private keys, the Canadian government, and governments in general, are unable to freeze an individual’s Bitcoin or cryptocurrency address. This is due to the fact that crypto is based on a blockchain, a digital public record that enables transactions to take place peer-to-peer rather than via a middleman, such as a bank.
Crypto Technology Offers Resilience in a Time of Authoritarian Ascendance
The desire of elites to use access to finances as an ultimate weapon against dissident individuals and nations, has perils and limitations, both within the traditional international monetary system, and the world of cryptos.
Some have pointed out that barring Russia from the Swift system may only speed a move by nations like Russia, China, Iran and likely others to erect an alternative where the U.S. dollar is not the reserve currency.
Even without the Russia Ukraine war, America’s inflationary abuse of the dollar, and growing penchant for using the dollar hegemony as a weapon in sanctions, was inviting other nations to actualize a post dollar-as-reserve-currency future.
Meanwhile, cryptos offer another kind of resistance to the political manipulations of financial power being used more nakedly by the globalist order.
Nunchuk, a self-custodial bitcoin wallet and software supplier, provided an example during the Canadian trucker protest of how crypto transactions that don’t go via third parties are less vulnerable to government monitoring.
The corporation claimed it made the request after a judge ordered it to freeze and reveal information about assets linked to the Canadian protesters, the Washington Examiner reported.
In response to the request, the corporation emphasized, “We are a software provider, not a custodial financial intermediary. We do not collect any user identification information beyond email addresses. We do not hold any keys.”
Many politicians and other authorities have yet to fully understand how cryptocurrencies, with security phrases and cryptographic private keys, provide a level of ownership and ability to quickly and directly transact with others, previously unknown.
Even so, some leading voices in the blockchain space felt compelled to say their platforms were not likely to be subject to sanction avoidance by Russia, the latest and largest target of financial canceling the world has yet witnessed.
Brad Garlinghouse of Ripple (XRP), currently embroiled in a years long battle of their own with the SEC over supposed illegal activities, commented on 2 March:
“RippleNet, for example, has always been – and remains today – committed to NOT working with sanctioned banks or countries that are restricted counterparties. Ripple and our customers support and enforce OFAC laws and KYC/AML.”
RUSSIANS, UKRAINIANS FLOCK TO DIGITAL CURRENCIES. Citizens of Russia and Ukraine have been snapping up Bitcoin and crypto as a place to store value as the worth of their national currencies plummet.
On Binance, the world’s largest exchange, Bitcoin traded at the equivalent of $46,646 in Ukraine’s hryvnia currency; on Kuna, Ukraine’s chief exchange, Bitcoin traded as high as $51,240 worth of hryvnia.
At the same time in the U.S., Bitcoin was trading at about $44,178, according to CoinDesk.
Bitcoin also has rallied in exchange for rubles from 20 through 28 February, before the war began. During that period, 1,792 Bitcoin was bought with rubles, compared with 522 during the nine days before that, Binance data shows.
“The situation in Ukraine has brought to light the value of Bitcoin as an alternative monetary network,” Timo Lehes, co-founder of the Swarm Markets crypto trading platform, said in comments quoted by The Wall Street Journal.
FANTOM BLOCKCHAIN ROCKED BY DEVELOPER RUG-PULL. It wasn’t just the departure of two leading developers that caused the Fantom blockchain to take a dive over the weekend.
It was also the news from Anton Nell, senior solutions architect at the Fantom Foundation, who said that some 25 “apps and services” running on the network via smart contract technology would be terminated on 3 April 2022.
Nell and technical advisor Andre Cronje are both “moving on” from Fantom at the same time.
Among the takedowns include yearn.finance, a popular DeFi app, and others.
The news sent the Fantom network token, and tokens related to different apps on the platform, plunging into double-digit losses.
Yearn Finance’s YFI token dropped 10.04 percent in 24 hours, while FTM, the Fantom blockchain’s native token, lost more than 15 percent.
The Fantom Foundation issued statements to try to assure token holders, mentioning upcoming good news, including a Fantom Virtual Machine that would help interoperability with other blockchain networks:
“…the development of Fantom won’t be impacted by Andre’s decision.
“Big things are coming, as scheduled.
“We’re still on track to ship snapsync and a db upgrade in the short term and to release middleware improvements such as flat storage and the fvm.”
As of Monday, FTM appeared to have stabilized, at least for the moment, at 1.43 dollars a token.
Take-Away Lessons for Investors
The lesson of the Fantom situation is that people who introduce smart contracts, which are analogous to software programs, can decide to close up shop, in the same way that software companies or websites that offer different functionalities, can shut down.
There’s also an important difference, though. Blockchain apps often have associated tokens that people can buy as investments. Successful apps can see their token prices rise. And vice-versa. In the case of a DeFi app, tokens might also be locked up while earning interest etc.
The news about yearn.finance and other apps running on the Fantom blockchain, lead to confusion and panic about what would happen to investments in different situations.
The main Fantom token may only suffer in the short or medium term from what has occurred in that ecosystem. But the rug-pull by Nell and Cronje will hurt people who supported their app projects, and should make users holding tokens of apps on Fantom and other networks more closely examine smart contract powered apps in which they may be investing, and the people or groups behind them.
There are increasing cases where a group that has utilized a certain network—say Ethereum—to launch and run an app, switch to another network, to reduce transaction fees or speed, or for some other reason. But in these cases, token holders usually have much less to worry about. The project is continuing, and advantages of a new network may even enhance the value of project tokens.
As the Gemini Exchange noted, in 2021 Ethereum was still by far the leading network for dApps, due to several factors:
“Despite the growth of alternative blockchain networks, decentralized applications (dApps) exist almost exclusively on the Ethereum blockchain. The Ethereum Virtual Machine (EVM) is the primary driver of this trend, with development kits and application templates serving to continuously improve the developer experience. In combination, these tools enable the development of any application that lacks its own platform. Projects can leapfrog the development of a proprietary blockchain by using the Ethereum framework. Decentralized apps on the Ethereum blockchain also benefit from a vast community of developers, amplifying the network effect.”
In general, smaller and start-up blockchain projects and networks make for riskier investments, though they might also promise a chance at higher returns.