It will be easy to track the crypto wallets of Russian exchanges, brokers, and digital depositories should foreign authorities decide to impose sanctions; consequently, assets passing through these wallets would be classified as high-risk, Kirill Pistsov, Head of Product Development at the financial group Finam, told Bits.media.

The task of imposing sanctions has been made easier by changes in Russian legislation that required all market operators to become fully regulated, thereby increasing the transparency of liquidity provider addresses and asset flows, the investment holding expert explains. Cryptocurrency that has passed through legitimate Russian platforms carries a risk for its owner: foreign platforms might demand proof of the funds' origin or even refuse to accept a transfer. Arbitrage opportunities between Russian and global platforms will diminish, potentially leading to the formation of—in the words of the Bits.media interviewee—"a separate pricing circuit trading at a discount to international rates."

Under Central Bank regulations, only Bitcoin, Ether, and the USDT stablecoin are permitted to circulate legally in Russia. While it is entirely feasible to buy Bitcoin or Ether on a Russian platform and store them in a hardware wallet, difficulties may arise when attempting to transfer them to an international exchange, use a foreign custodial service, or cash out via foreign exchange services, the Finam specialist believes. In his view, the risk is higher for USDT, as the stablecoin's issuer, Tether, has the ability to freeze its tokens in holders' wallets.

It will become easier to isolate the Russian crypto market from the rest of the world — Finam