There has been a lot of discussion about whether sanctions on money flows are effective in the world of cryptocurrency. Just today CNBC has an article here that Binance will not block Russian transactions even after requested by Ukrainian officials.
That leads to an interesting question — if crypto-exchanges refuse to enforce sanctions, what it the legal liability to individuals in those exchanges for violation of sanctions? I expect this to be an emerging issue that plays out in near real-time.
Because, what if a sanctioned individual coerces a “non-blocked” person to convert crypto for them? Who has a liability? How does a person living in a country that has sanctions against Russian individuals comply with sanctions? If you are a company, do you dare touch crypto at this time?
Interesting times.
One other thought, what does happen to crypto-currency values if trade with a sanctioned person becomes a violation of sanctions? Do people stop trading it? Does it tank? Or will this be completely ignored? I am not smart enough to have an answer.