The Financial Times reported that Switzerland will be freezing crypto assets of Russian individuals and businesses within the territory of the country.
The freezing of crypto assets would correspond with European Union sanctions that are now in place as retaliation against Ukraine’s invasion of Russia. According to the Financial Times, Swiss Finance Minister Guy Parmelin said Switzerland has blocked the bank accounts and tangible assets of 223 Russians in the last week alone, together with associates of Vladimir Putin, the President of Russia. Beyond the EU sanctions, the cryptocurrency limitations represent an extra consequence.
According to the Financial Times, Switzerland’s finance ministry needed to freeze crypto assets in order to maintain the viability of the country’s blockchain business. Per the Swiss Venture Capital firm CV VC, roughly 1,128 blockchain startups were based in Switzerland or the neighboring principality of Liechtenstein as of December of last year.
The European Union unveiled steps on Wednesday to put the squeeze Russia’s ability to use cryptocurrency to circumvent economic sanctions. The Finance Minister of France, Bruno Le Maire stated that “we are taking measures, in particular on cryptocurrencies or crypto assets which should not be used to circumvent the financial sanctions decided upon by the 27 EU countries.”
The borderless aspect of digital assets has been highlighted by requests for exchanges like Coinbase and Binance to prohibit and freeze Russian accessibility to cryptocurrencies. Though an exchange may freeze or restrict access to virtual assets, it is considerably more difficult to do so if the cryptocurrencies are held in self-custodial wallets or cold storage.
Bruno Le Maire added that “if someone holds their crypto key themselves then, wherever they are, it’s going to be virtually impossible to identify them.” Nonetheless, if the users are utilizing crypto exchanges and funds, they can be identified and dealt with, according to the Minister.