Crypto exchanges won't bar Russians, raising fears of sanctions backdoor | Hacker News Reader

Crypto exchanges won't bar Russians, raising fears of sanctions backdoor

reuters.com

32 pointspseudolus25 comments

This is one of those ”never let good crisis go wasted” moments

> But many of the world's largest crypto exchanges - including Binance and U.S.-based Kraken and Coinbase - have stopped short of a blanket ban on Russian clients, despite a plea from the Ukrainian government for one. They said they would screen users and block anyone targeted by sanctions.

> The standoff illustrates the ideological gulf between the traditional financial sector and the world of cryptocurrencies

There is no ideological gulf. There has not been blanked ban on Russian foreign bank accounts or Russian credit and debit card transactions. Why cryptocurrencies would be different? Sanctioned entities, or so called ”designed individuals”, or already being screened on cryptocurrency exchanges as no one is so stupid that take the criminal liability on not doing so.

Cryptocurrency is also more traceable compared to shell company games and other games oligarchs might be playing. While there is no doubt criminal use of cryptocurrencies, in practice they cannot be used in government scale or moving large sums of assets undetected. Any rushed regulation is a knee-jerk reaction - politicians and their lobbyist may have their own agendas that are not directly related to evading sanctions.

Yea, these exchanges are following the exact same sanction regulations any other bank is required to follow, it seems. Not sure why we'd expect any different.

KYC

As long as they are following the sanctions, this seems OK.

It might even be a net benefit since Russia has banned it's citizens leaving with any more than $10k in cash [0], and many Russians are now trying to depart. So they could now buy a bunch of cryptocurrency, get cans for the trip plus a bit, arrive outside and recover their cash. This is exactly what we want to prevent in the sanctions leaders and oligarchs, but what we'd like to encourage for the ordinary Russians trying to leave

[0] https://www.reuters.com/world/europe/putin-bans-cash-exports...

Yes; a back door EXIT!

Crypto exchanges are absolutely destroying the Ruble right now.

Having them use crypto (especially Bitcoin, but most other crypto is similarly traceable) would be a gold mine for the intelligence agencies I imagine.

It's probably why the NSA created Bitcoin in the first place. Or was it really the totally benevolent mysteriously unknown Satoshi Nakamoto who is worth $70 billion but never spent a dime.

I tend to doubt this narrative, dedollarization would generally not be in the interest of any US government entity.

Putting on a bit of a devils advocate hat - if you knew SOMETHING was going to happen in the space, wouldn’t it make sense to build the first thing in a way it helps your interest to help starve out alternatives or get a chunk of the traffic in a way you can use?

I don’t think that’s what happened, but the NSA and CIA have spun up or invested in a number of tech and cryptography firms over the years (as came out later).

The one scenario I can see is a possible anti-war faction in the NSA or CIA trying to decimate the military industrial complex...but I feel other countries with talented devs have more incentives to create this than US based orgs that are protected by this complex.

I should probably mention, for those that are unaware, removing power from central banks (aka what Bitcoin does by existing) makes large scale drawn out wars extremely difficult to fund and sustain.

Bitcoin doesn’t actually do that though. It literally maxes out at 7 transactions per second. No central bank (or any other bank besides maybe one in rural Wyoming) does that few.

By LOOKING like it might be, while also definitely NOT being, it is filling the vacuum.

This view is a limitation of your understanding of Bitcoin.

Layer 2 solutions like lightning and liquid network are built to scale to infinite transactions per seconds at near $0 cost if p2p participants choose that fee price point, which many current routing nodes do.

Hardly - it’s a factual statement on it’s face, and what you said doesn’t refute it either.

Lightning is not only very recent (welll past any planning timeline for anyone), but not widely adopted - and it would be nice if it would be, but it basically makes bitcoin that same thing it was trying to get away from for those clients - beholden to transaction brokers.

Not as familiar with liquid, but if grouped the same way I imagine it’s the same problem.

If you use bitcoin, it’s the same limitation as it ever has been, and good luck getting community consensus to change it - I was there for the Bitcoin cash split (and a lot of other discussions before that).

Your understanding may be from circa 2017 too. LN is in production for years now and is used by small countries for retail payments. We can only see the amount of capital in channels in aggregate, we have no visibility into it’s actual use. I don’t hear too many complaints?

So you have no idea how much it is actually used, and it's only been around a few years - and that means it's a viable replacement for central banks?

>So you have no idea how much it is actually used

It's peer to peer. If 2 nodes (Kucoin and Cashapp for example) send a trillion transactions between each other, how would a 3rd party know?

You were there for the blocksize wars but didnt realize L2 was on the roadmap, which is partially why they didn't increase the block limit? Many core devs are now advocating for lowering the blocksize because of L2...

Quote from Satoshi Nakamoto:

>One use of nLockTime is high frequency trades between a set of parties. They can keep updating a tx by unanimous agreement. The party giving money would be the first to sign the next version. If one party stops agreeing to changes, then the last state will be recorded at nLockTime. If desired, a default transaction can be prepared after each version so n-1 parties can push an unresponsive party out. Intermediate transactions do not need to be broadcast. Only the final outcome gets recorded by the network. Just before nLockTime, the parties and a few witness nodes broadcast the highest sequence tx they saw.

Sad state of HN members... Simple established facts about layer 2 scaling and Bitcoin history get downvoted. Ignoring the voting is now in ones interest, which sort of breaks this site.

>Hardly - it’s a factual statement on it’s face, and what you said doesn’t refute it either.

This is wrong, Bitcoin can process infinite transactions in batched form using Layer 2.

The scaling path was clear from the early years, your understanding of how this network was designed to scale while maintaining sufficient decentralization is limited.

I stand by my original statement. Your view is a limitation of your understanding of Bitcoin.

Bitcoin doesn't do damage to the dollar, it enables easier wealth extraction from US adversary countries.

I disgaree, Bitcoin kills central banks including the federal reserve.

Citation needed.

Gresham's law and Thier's law.

that would be the worst possible thinkable, traceable backdoor

There's a reason why the russian government removed the tax from gold purchases instead

> They said they would screen users and block anyone targeted by sanctions.

So not a blanket bar, but following sanctions

(though I'm not sure how long this optimism will last)

At the end of the day the Russians can even run their own exchanges. They have fuel and food, they're self sustaining.

Yes, they're definitely self-sustaining at a pre-1980 or so level. They have raw materials, abundant energy, the ability to feed themselves, and a decent IQ pool to pull from to design and manage what they need.

But they still need precision machine tooling, optics, semiconductors, etc to exist as a post-1980 economy.

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