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March 25, 2022

Congressional Hearing: “Understanding the Role of Digital Assets in Illicit Finance”

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Chainalysis is a data analysis company that uses block explorers to observe patterns and gather insights about cryptocurrency users based on their on-chain transaction behavior. A few weeks ago the company tweeted an image showing a substantial increase in “transaction volumes for trading pairs involving the Russian ruble and Ukrainian hryvnia.” (Chainalysis Tweet)

Chainalysis co-founder, Jonathan Levin, spoke with the Congressional Committee on Banking, Housing, and Urban Affairs about the company’s perspective on illicit cryptocurrency activity. When asked whether the use of cryptocurrency would make it easier for an ultra-wealthy Russian oligarch to launder money and evade U.S. economic sanctions, Levin responded “Russian elites and financial authorities have likely been preparing for sanctions, and would have carried out those transactions slowly over the past few months.” (Full Senate Hearing)

It is worth mentioning that Bitcoin and other public permissionless blockchains create an immutable record of transactions that anyone with internet connection can audit. This means most cryptocurrency transactions are easily traceable if you know where to look and how to interpret blockchain data.

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