Chainalysis introduced two new tools to help businesses protect themselves from sanctions through blockchain in light of Russia’s global trade restrictions.
Sanctions against Crypto
According to the company, the first tool is an on-chain Oracle. The smart contract will keep data from various economic embargo lists that have been provided by western authorities such as the US, EU or United Nations. Other smart contracts can call the oracle to verify any blockchain wallet before they interact with it. This tool was published yesterday.
The second tool, an API tool for mobile/web user interfaces, will source the same data to validate wallets and is expected be released next month.
Chainalysis stated its support for Ukraine in the conflict with Russia and stressed the need to be on the “right side” of the crypto industry. Its new tools are therefore free to use.
The company stated that blockchain technology is available to both “good and bad actors.” While the Ukrainian government’s fundraise was celebrated by the industry, there are concerns that cryptocurrency could be used in Russia by sanctioned entities or individuals for sanctions evasion.
These tools are targeted at web 3 applications such as decentralized exchanges that “do not possess the lightweight solutions they require to comply with Sanction Policies.”
AML and KYC requirements could soon be available to Defi. Avalanche plans to create a subnet with KYC functionality as part of its recent incentives program.
How Crypto can you help Russia or Ukraine?
The use of cryptocurrencies allows peer-to-peer long distance transactions. They are a great option for international fundraising campaigns, from Canada’s Trucker Convoy to Ukraine’s Military Defence.
There are growing concerns among politicians that the Russians could also use them to circumvent trade restrictions. These concerns have prompted crypto exchanges to cease servicing Russian accounts. However, the companies hesitated to comply.
But, exchanges that were legally required to sanction certain entities have fulfilled their obligations. Other players in the industry, such as “Flexpool”, an Ethereum mining pool, have also decided to stop providing service to Russia.
Overall, the crypto community has been very generous in its support of Ukraine. It has received tens to millions of dollars in Bitcoin Ether, Dogecoin and other cryptocurrency.
Marla Brooks – Financial Analysis
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