The war with Ukraine threatens Russia with serious economic shocks that will also affect the cryptocurrency market. According to the owners of the crypto business in the Russian Federation interviewed by Cryplogger, the general toxicity of the jurisdiction has deprived high-tech startups of prospects, and blocking exchange accounts is just a matter of time.
Startups
Under the sanctions, new projects will be isolated by the market of one country, Roman Nekrasov, co-founder of the ENCRY Foundation, is convinced.
“High inflation, the fall of the ruble, the fall in the income of the population, and consequently the income of producers and entrepreneurs working in Russia. Who needs innovation in such conditions? The demand for new technologies and developments will definitely be reduced first, not to new products – to cope with the current basic operating costs, ”he said.
According to Nekrasov, startups are now urgently trying to move en masse to Latvia, Estonia and Portugal. Armenia and Georgia are also considered as countries actively developing digital hubs.
The place of the departed will be empty for a long time, says BaksDAO co-founder Mikhail Pospelovsky.
“Startups wishing to enter the market will face problems in attracting funding. The pressure on projects will increase the blockade of the Russian Federation by many large technology companies that are at the forefront of the industry, ”he told Cryplogger.
In the medium term, there will be less work for IT specialists, and lower salaries, said Sergey Troshin, head of the Six Nines data center.
Russia will stagnate in the technological sphere against the backdrop of a crazy outflow of Western investment, the head of Comino, Yevgeny Vlasov, is also convinced.
Indefibank CEO Sergey Mendeleev suggested that Russian founders would have to start any business meeting with a declaration of their position on Ukraine:
“The stakes are too high to try to play up – they simply won’t do business with you. Just in case or for ideological reasons – it does not matter. These are the current realities, and the crypto business is no different from any other.”
Exchanges and exchangers
The largest crypto-exchanges and exchangers have not been registered in the Russian Federation, so the sanctions have not yet particularly affected them. However, in the future, cases of blocking and freezing funds when buying cryptocurrencies through exchangers with European registration may become more frequent.
“It will look like this: a person pays for a purchase or sends coins for sale, and then receives an email demanding to confirm the source of income. So I would now be very careful about any operation with cryptocurrency, especially through exchangers,” warned Roman Nekrasov.
Due to sanctions, certain difficulties are inevitable for all exchange clients living in the Russian Federation, says Sean Rach, co-founder of the international platform hi.com, which has a Russian representative office.
According to his forecasts, operators of legitimate cryptocurrency services will have to include verification of users against a sanctions database in the KYC procedure.
“Sanctioned officials will need to undergo additional screening,” Rach added.
Now the cases of disconnection of Russians by foreign crypto-exchanges are rare. Access to digital currencies in the Russian Federation will continue until at least one trading platform operates in the country, Sergei Troshin emphasized.
Changing legislation will have the main impact on the cryptocurrency business in Russia, says Sergey Mendeleev, CEO of Indefibank.
“I do not think that all world exchanges, especially Asian ones, will refuse Russian clients. But even if this happens, it will still not stop the work, since cryptocurrencies are still about decentralization, and not about prohibitions and regulation. Yes, it will become a little more complicated and more expensive, yes, much more toxic in terms of jurisdiction, but nothing more,” he said.
But since the situation is changing every hour, it is impossible to say anything with 100% certainty, the experts explained.
Mining
Russia risks losing its place in the top 3 world mining centers, Mikhail Pospelovsky from BaksDAO believes.
“Miners may face problems in the field of equipment supply. Repairing old devices is likely to be more difficult as well. The pressure is reinforced by the refusal of a number of mining pools to work with the Russians. Probably, many miners from the Russian Federation will be forced to migrate,” the expert added.
Roman Nekrasov, co-founder of the ENCRY Foundation, has an opposite opinion. He is convinced that mining will be hit not by sanctions, but by plans to tighten regulation of the industry.
“Equipment is imported mainly from China, there are no restrictions here. The bulk of investments also came from Asian countries,” he said.
The industry remains resilient due to the decentralized nature of the mining process itself. However, representatives of the Russian mining hosting BitCluster warn that the shortage of devices and spare parts is quite real.
“Additional restrictions related to currency rules may be imposed on the industry. It is also possible that China will start a war with Taiwan, which produces chips for the whole world. It’s hard to say what consequences this may have on mining,” added Sergey Troshin, head of the Six Nines data center.
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The war with Ukraine threatens Russia with serious economic shocks that will also affect the cryptocurrency market. According to the owners of the crypto business in the Russian Federation interviewed by Cryplogger, the general toxicity of the jurisdiction has deprived high-tech startups of prospects, and blocking exchange accounts is just a matter of time.
Startups
Under the sanctions, new projects will be isolated by the market of one country, Roman Nekrasov, co-founder of the ENCRY Foundation, is convinced.
“High inflation, the fall of the ruble, the fall in the income of the population, and consequently the income of producers and entrepreneurs working in Russia. Who needs innovation in such conditions? The demand for new technologies and developments will definitely be reduced first, not to new products – to cope with the current basic operating costs, ”he said.
According to Nekrasov, startups are now urgently trying to move en masse to Latvia, Estonia and Portugal. Armenia and Georgia are also considered as countries actively developing digital hubs.
The place of the departed will be empty for a long time, says BaksDAO co-founder Mikhail Pospelovsky.
“Startups wishing to enter the market will face problems in attracting funding. The pressure on projects will increase the blockade of the Russian Federation by many large technology companies that are at the forefront of the industry, ”he told Cryplogger.
In the medium term, there will be less work for IT specialists, and lower salaries, said Sergey Troshin, head of the Six Nines data center.
Russia will stagnate in the technological sphere against the backdrop of a crazy outflow of Western investment, the head of Comino, Yevgeny Vlasov, is also convinced.
Indefibank CEO Sergey Mendeleev suggested that Russian founders would have to start any business meeting with a declaration of their position on Ukraine:
“The stakes are too high to try to play up – they simply won’t do business with you. Just in case or for ideological reasons – it does not matter. These are the current realities, and the crypto business is no different from any other.”
Exchanges and exchangers
The largest crypto-exchanges and exchangers have not been registered in the Russian Federation, so the sanctions have not yet particularly affected them. However, in the future, cases of blocking and freezing funds when buying cryptocurrencies through exchangers with European registration may become more frequent.
“It will look like this: a person pays for a purchase or sends coins for sale, and then receives an email demanding to confirm the source of income. So I would now be very careful about any operation with cryptocurrency, especially through exchangers,” warned Roman Nekrasov.
Due to sanctions, certain difficulties are inevitable for all exchange clients living in the Russian Federation, says Sean Rach, co-founder of the international platform hi.com, which has a Russian representative office.
According to his forecasts, operators of legitimate cryptocurrency services will have to include verification of users against a sanctions database in the KYC procedure.
“Sanctioned officials will need to undergo additional screening,” Rach added.
Now the cases of disconnection of Russians by foreign crypto-exchanges are rare. Access to digital currencies in the Russian Federation will continue until at least one trading platform operates in the country, Sergei Troshin emphasized.
Changing legislation will have the main impact on the cryptocurrency business in Russia, says Sergey Mendeleev, CEO of Indefibank.
“I do not think that all world exchanges, especially Asian ones, will refuse Russian clients. But even if this happens, it will still not stop the work, since cryptocurrencies are still about decentralization, and not about prohibitions and regulation. Yes, it will become a little more complicated and more expensive, yes, much more toxic in terms of jurisdiction, but nothing more,” he said.
But since the situation is changing every hour, it is impossible to say anything with 100% certainty, the experts explained.
Mining
Russia risks losing its place in the top 3 world mining centers, Mikhail Pospelovsky from BaksDAO believes.
“Miners may face problems in the field of equipment supply. Repairing old devices is likely to be more difficult as well. The pressure is reinforced by the refusal of a number of mining pools to work with the Russians. Probably, many miners from the Russian Federation will be forced to migrate,” the expert added.
Roman Nekrasov, co-founder of the ENCRY Foundation, has an opposite opinion. He is convinced that mining will be hit not by sanctions, but by plans to tighten regulation of the industry.
“Equipment is imported mainly from China, there are no restrictions here. The bulk of investments also came from Asian countries,” he said.
The industry remains resilient due to the decentralized nature of the mining process itself. However, representatives of the Russian mining hosting BitCluster warn that the shortage of devices and spare parts is quite real.
“Additional restrictions related to currency rules may be imposed on the industry. It is also possible that China will start a war with Taiwan, which produces chips for the whole world. It’s hard to say what consequences this may have on mining,” added Sergey Troshin, head of the Six Nines data center.
Subscribe to Cryplogger news in Telegram: Cryplogger Feed – the entire news feed, Cryplogger — the most important news, infographics and opinions.
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