by Summer Wright
Summer Wright THE EVOLUTION OF SANCTIONS EVASION:HOW CRYPTOCURRENCY IS THE NEW GAME IN EVADING SANCTION ANDHOW TO STOP IT Spring 2023 Int’l J. L. Ethics Tech. 1 (2023).
Available at: https://doi.org/10.55574/PYEB5374
Author Information: Summer Wright, California Western School of Law.
Abstract: When one country illegally invades another sovereign country, repeatedly, utilizing the mechanism of sanctions to try and curb the misconduct, has become a favored approach among democratic countries. Russia once again invaded Ukraine in the early part of 2022, defying all international pressure, to refrain from the illegal act. The rapid response from the international community was a litany of sanctions intended to cripple and deter Russia’s actions. Sanctions evasions are not a new challenge for sanctioning countries and agencies. A United Nations (UN) report notes that low levels of governmental oversight in the cryptocurrency sector have enabled North Korea to generate income at an alarming rate. The efficacy of financial sanctions in this way is consistently undermined through illicit cryptocurrency transactions. As the cryptocurrency sphere exceeds forty-two million users worldwide, the question on those issuing sanctions remains: If cryptocurrency is left unregulated, will financial sanctions lose their power? This article will outline the use of sanctions as a preferred foreign policy tool and how they work. I look at the various sanctions the United States, European Union, United Nations have levied against the Russian Federation in response to repeated invasions of Ukraine’s sovereign territory. I will also analyze cryptocurrency, defining what it is, how it works to lay the groundwork for the analysis of the current cryptocurrency regulations and how this relates to concerns of illicit activity within the cryptocurrency sphere, as a means for sanctions evasion. Several countries including The Russian Federation (Russia), The Bolivarian Republic of Venezuela (Venezuela), The Islamic Republic of Iran (Iran) and The Democratic People’s Republic of North Korea (North Korea) are using innovative cybercrimes and other crypto-based efforts to evade economic and financial sanctions. This article will consider the pushback on regulation from the crypto industry as well as illuminating the loopholes that are causing increased concern and current incidences of illicit activity internationally. Finally, I propose a few areas of consideration for creating an international regulatory framework to help combat the evasion of financial sanctions, using cryptocurrencies.
Keywords: Sanctions, Russia, Ukraine, Cryptocurrency.
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Persistent link: https://www.ijlet.org/2023-1-1-25
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