Most Russian and Ukrainian cryptos are sent abroad

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Source: AdobeStock / Natalie Pokrovska

The vast majority of all Russian and Ukrainian crypto transactions are sent to foreign platforms – and tokens end up in Western Europe, East Asia and North America, according to a new report.

These are the findings of the latest cryptocurrency geography report released by the New York-based blockchain analytics company. Channel analysis.

Data shows that about 86% of all cryptocurrencies sent from addresses in Russia and 87% of cryptocurrencies sent from Ukraine ended up at addresses abroad between July 2020 and June 2021. Only Turkey-based crypto investors sent more crypto to addresses abroad – with 92% of their crypto transfers made to non-Turkish addresses.

In May 2021 alone, nearly $ 8 billion worth of crypto was transferred from Eastern Europe to Western European countries, more than half of which also ended up in North America, Asia. East and Central and South Asia.

Chainalysis wrote that “Russia and Ukraine appear to be sending a much larger than average share of cryptocurrency to other countries.”

He also hinted that nations may have experienced a crypto-fueled “capital flight” this year, explaining:

“It is impossible to say for sure how much cryptocurrency-based capital flight occurs in any given country, but the data suggests that it can occur in Eastern Europe in general and in Russia and Ukraine in particular.”

Analysts claimed that a “widespread distrust of institutions” was highlighted and could perhaps explain why Russians and Ukrainians were so keen to make sure their crypto was elsewhere in the world – indicating the latest Edelman confidence barometer. The latter found that the confidence of Russians in companies, banks, government, etc. was the lowest of all the countries surveyed.

Further, Chainalysis added that “tax evasion may also be part of the history of cryptocurrency adoption in Eastern Europe, especially Russia and Ukraine,” because “the two countries make it difficult for citizens to send large sums of money abroad “.

Also, crooks can play a part in the equation: The company noted that Ukraine “accounts for most” of this activity, as it “sends more web traffic to scam websites than any other country, making more than doubling the total number of web visits of the second-ranked country.

However, it has also been suggested that the Russians may be looking to move their money out of the country because they simply saw the writing on the wall. A number of larger Russian crypto exchanges have moved overseas in recent years.

Alexander Vasiliev, Co-Founder and Commercial Director of the Global Payments Network Mercuryo, Recount Cryptonews.com that “the huge outflow of cryptocurrencies from Russia and Ukraine to other regions, especially Western Europe, can be attributed to many factors.” And the main one, he noted, “perhaps the need to avoid tax obligations.”

He explained:

“For example, in Russia, dominant tax laws state that cryptocurrencies should be treated as ‘personal property’ subject to mandatory reporting to Russian tax authorities. Many crypto holders will instead push funds to other regions with more favorable tax laws. “

The Mercuryo co-founder noted that the fact that European market authorities have given the green light to a number of crypto exchange-traded funds (ETFs) may have “encouraged investment from local and international investors.”

“The flight of crypto capital from Russia and Ukraine can also be attributed to these products, as well as other investment products in the crypto ecosystem that are operated outside the region,” Vasiliev said.

Just this week, Russia Ministry of Finance has hinted that crypto exchanges may have to leave the country, although the ministry (unlike the fiercely anti-crypto central bank) says he’s not opposed to citizens trading cryptos on foreign trading platforms.

As such, “despite a decline in peer-to-peer crypto activity,” the authors of the Chainalysis report noted that “Russia and Ukraine show high trading volumes on cryptocurrency platforms centralized, both globally and for retail level transactions in particular “.

Since relatively few of these larger ‘centralized cryptocurrency platforms’ now operate on Russian soil, it is possible that the Russians will buy tokens which they then send to more reputable and larger exchanges and wallets. large located in international locations.
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Learn more:
– Putin says crypto is “not worthless” and has “a right to exist”
– No crackdown on crypto in Russia, but keep coins off Russian soil, official warns

– Bitcoin and crypto mining costs could rise in Russia as regions complain
– Russian blockchain experts offered nearly 5 times the national average salary

– Ukraine to bring crypto into legal sphere after adoption of draft law on “legalization”
– Ukraine could allow indirect crypto payment and will regulate exchanges
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(Updated at 14:01 UTC with commentary by Alexander Vasiliev.)


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