Russians warned crypto assets could be frozen

Russians could face the freezing of assets in one of the most popular cryptocurrencies, the USDT stablecoin, "simply on instructions from the US administration". Large assets belonging to holders from Iran and Russia have been blocked in recent years, according to a Russian banking sector official.

Source: The Moscow Times, an independent Amsterdam-based news outlet

Quote: "A bank serving Putin's military-industrial complex has warned of the threat of Russians' cryptocurrency assets being frozen. Russians may have their assets frozen in one of the most popular cryptocurrencies, the USDT stablecoin."

Details: Petr Fradkov, CEO of PSB, a key bank for Russia's military-industrial complex, explained that Tether Limited retains full control over the USDT it issues and can "freeze" funds in accounts not only of owners linked to unlawful activity, but also "simply on instructions from the US administration".

"There have already been cases of this happening. In recent years, these mechanisms have been used to freeze significant assets held by people in Iran and Russia," Fradkov said.

Fradkov said the issuer of USDT is one of the largest holders of US Treasury bonds, meaning that its underlying reliance on the dollar and the US debt market "does not disappear".

"There should be no illusions here: yes, the technology has changed, but the dependence remains. This shows that even a modern digital instrument can remain fully controlled by the issuer," Fradkov explained.

Background:

• It was reported earlier that a new cryptocurrency created to facilitate settlements bypassing sanctions against Russia had moved more than US$9.3 billion on a specialised crypto exchange in just four months since its launch.
• In July 2024, Russia's State Duma (the lower chamber of parliament) passed a law legalising cryptocurrency mining in Russia in the second and third readings.
• Earlier, the sanctioned Russia-linked crypto exchange Grinex suspended operations after assets worth RUB 1 billion, or US$13.1 million, were stolen in a cyberattack.

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