Direct from the desk of Dane Williams.
While regulated crypto exchanges can ban Russian citizens from using their fiat to crypto on/off ramps, there will always be a way out.
While Pomp’s ties to the legacy investment world bring up some glaring conflicts of interest when it comes to him choosing to not actually practise the decentralisation he preaches, his freebie emails are certainly good conversation starters.
The last time I used one of his emails as a starting point and added Hive’s opinion who owns Web3, I really liked the resulting discussion had in the community so I’m going again.
Today’s email shared his opinion that we should not normalise economic war on innocent civilians.
I take a look at the news around crypto exchanges being asked to ban Russian citizens and share my opinion on why it's government who are once again wasting everyone’s time and money because they don’t understand the tech.
Crypto exchanges asked to ban regular Russian citizens
This all comes on the back of the following Bloomberg headline flashing across trading terminals this week:
BLOOMBERG: BIDEN ADMIN ASKED EXCHANGES TO BLOCK RUSSIAN INDIVIDUALS AND ORGS FROM USING BITCOIN AND CRYPTO TO AVOID SANCTIONS.
Biden genuinely thinks that a few US and EU regulated crypto exchanges refusing to ban anyone who has signed up using a Russian passport, weakens the West’s ability to isolate Moscow in the aftermath of their invasion of Ukraine.
In the mainstream media, this is being billed as an ideological standoff between the legacy financial system and the pesky anarchists involved in the new system of magical internet money.
But this is such a bad take.
The reality of the matter is that it doesn’t matter whether certain crypto exchanges ban or don’t ban regular Russian citizens.
Even if they are banned, the tech and globalised nature of the online crypto ecosystem means that people can simply circumvent these measures.
Why crypto exchanges banning Russian citizens doesn’t matter
Keep in mind that the only exchanges that these sanctions have the ability to effect, are those who fall under the regulatory jurisdiction of the US and EU governments.
Think the major names like:
- Binance
- Kraken
- Coinbase
But contrary to what most Americans, obviously including what Joe fucking Biden thinks, they aren’t actually the centre of the universe.
Heck, with an endless list of places willing to host crypto exchanges outside of the SEC’s tentacles, they are no longer even the centre of the financial universe.
Simply Google crypto exchanges without KYC and peruse the endless list of wild west exchanges who are happy to take the deposit/withdrawal fees to onboard fiat into crypto with no questions asked.
Obviously there is a ton of scammy shit in there, but there are also legitimate options for regular people caught up in the collateral damage of war.
Literally the only value that regulated centralised exchanges have in today’s crypto landscape, is that they’re easy and potentially(?) trustworthy, fiat on/off ramps.
They make things easier and safer for people to move fiat in and out of crypto..
That’s it.
Just remember that once money is in the crypto ecosystem, its permissionless tech enables you to spend and move your coins around at will.
Remember what we spoke about on the blog yesterday when we answered no to the question: Can Bitcoin be seized by governments?
Exactly the same concept applies to anyone and everyone using crypto.
As long as you remain in control of the keys, then nobody can stop you.
Governments need to stop wasting everyone’s time
The reality of the matter is that US and EU regulated exchanges are the only ones that would be forced to ban Russian citizens from using their fiat on/off ramps..
But with a myriad of unregulated exchanges offering the same non-KYC fiat on/off ramps that they do and the permissionless nature of using crypto networks themselves, any ban would be a complete and utter waste of everyone’s time and effort.
For me, this is just like the SEC going after asset backed stablecoins when the world of algorithmic stablecoins exists.
Another complete waste of time.
Governments need to learn that crypto now offers a permissionless parallel system that anyone has access to.
Regardless of their location or ideology.
It will always be accessible to anyone who needs it and if you’re willing to look hard enough, there will always be fiat on/off ramps available.
In order to remain relevant, it is very much in the strategic interests of governments to take a stake in the system and educate their citizens.
Not waste everyone's time by asking a few regulated exchanges to ban regular people holding Russian passports.
Best of probabilities to you.
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