News Summary for February 2022: Online Gambling, Crypto & Payments

Considering the latest developments in Ukraine, Fast Offshore brings you the top news from Payments, Online Gambling, Blockchain, related to the crisis.

Ukraine rolls out banking restrictions following the Russian invasion

The Ukrainian central bank has prohibited all payments to Russia and Belarus as well as all transactions in either of their currencies. The decision came one day after Moscow invaded from all sides and started making its way to the capital of Kyiv. In addition, the bank suspended all digital money transfers such as e-money. eWallet providers are also no longer allowed to replenish user accounts, hitting platforms like Venmo or PayPal. 

The forex market in the country has also been halted and ATM withdrawals limited, driving many Ukrainians to use cryptocurrency instead. One leading Ukrainian forex exchange reported an increase in traffic and purchases of Tether, a crypto pegged to the USD. Before the war, the government had been keen to position the country as a cryptocurrency hub, and it had plans to open up to various companies and investors. It is unknown how long the measures will last as the invasion is still underway, and there is no indication of how things will play out.

Massive sanctions rolled out against Russia

Following the invasion of Ukraine, the US, UK, and most of Europe have rolled out heavy sanctions against Moscow, warning of more if the situation continues to deteriorate. In the UK, the government imposed severe sanctions, including freezing all Russian state-owned and certain company-owned assets in British banks. In addition, over 100 oligarchs and firms have been seized to the tune of hundreds of billions of pounds. New restrictions have also been put in place to prevent Russians from accessing British banks. Additionally, the UK is working with other countries to move towards excluding Russia from the SWIFT system.

In the EU, member states have agreed to freeze the assets of Putin and his Foreign Affairs Minister Sergei Lavrov. Other sanctions include those against the financial sector, energy, transport, and export, with a third package of even more severe sanctions in the pipeline. These measures have been adopted by countries outside of the EU, including member states in the Balkans.

In the US, sanctions include the export of technology which President Joe Biden said will severely limit Russia’s ability to advance crucial parts of its military. He also cracked down on oligarchs and the families of those considered close to the Kremlin.

iGaming firms scramble to help Ukraine

Leading online gambling companies around the world have started rallying support for Ukraine as the country is gripped by a Russian invasion. With a developing iGaming sector and plenty of iGaming professionals coming from the country, as well as developers, game studios and support networks, the pinch on the sector is being felt. 

Several firms have offered to relocate and fly out staff and their immediate family using company funds. Others have offered grants for team members to help them leave either temporarily or permanently while others are in the process of doing so. Some companies have gone a step further and said they will end working relationships with Russian suppliers and partners, as well as clients, in a show of solidarity.   

Cryptocurrency helps out the Ukrainian army

A surge in bitcoin transfers has also been reported over the last few days with almost half a million dollars donated to an NGO assisting the Ukrainian military. This came as the value of bitcoin and various other crypto plunged after news of the invasion broke. Figures released by a blockchain company called Elliptic found that more than $5 million had been donated to Ukraine including other crypto coins, not just bitcoin. In addition, a local media, The Kyiv Independent which publishes in the English language, has raised around $15,000 in cryptocurrency.

The use of cryptocurrency during this war echoes the role it played in the Afghanistan crisis during summer and autumn 2021. As banks closed and were crippled across the country, cryptocurrency was used to get money to people, and also to pay to get them out. Apps even popped up allowing people to shop for groceries and pay in cryptocurrency, as local currency became harder to work with. 

One problem with cryptocurrency is that some fear it could be used by Russia and Russian individuals to bypass sanctions, due to its anonymity. It is likely those under sanctions had quite a long time to consider the consequences from the west, and many likely planned ahead. Therefore it is feared that many assets will have been transferred into crypto before sanctions were placed.  

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