Full-scale Russian aggression against Ukraine that started on February, 24 became a major shock to the global economy. Financial markets, commodity markets, as well as various sectors and industries suffered the consequences. The crypto market was among them. A broad range of exchanges, mining operations, and traders faced various challenges amid the war.
Today, the CEO of Kyrrex, Viktor Kochetov, will review this issue from two standpoints: the values of cryptocurrencies and crypto-assets, along with a broader ethical and fundamental issue posed on the crypto markets.
The value-related issue is relatively less complex than the ethical one. Specifically, the preceding global health crisis caused by COVID-19 indicated that the global investment and trading community viewed crypto as a solid alternative to fiat currencies and equities. Such an outlook has been contributing to a slight shock in the markets following any major crises, with subsequent recovery and growth resulting from an increase in demand at the later stages. The war in Ukraine had a similar effect on the crypto markets.
The two largest cryptocurrencies, BTC and ETH, reacted similarly after the start of the war in Ukraine. The value of these cryptocurrencies declined immediately after the news about the war by 5-10%. However, it was possible to observe a recovery two weeks following the aggression with a rapid growth within the scope of a month. BTC and ETH almost reached their price values indicated at the beginning of 2022.
At the same time, the ethical dilemma related to global crypto markets is more complex. This complexity stems from the nature of crypto, which is an advanced form of exchange without borders, intermediaries, and central authorities. Following the war, the major crypto exchanges published statements condemning the actions of Russia and its political leadership. The newly imposed sanctions were setting a precedent that was limiting the inherent freedom of the global crypto markets.
When Ukraine called for help, the crypto community raised millions of US dollars in cryptocurrencies and assets. Kyrrex set up a Charitable Foundation to support Ukraine during the war and help rebuild the country afterward. The digital bank has also donated over $100,000 to support people and soldiers directly. The help of various crypto market participants remains an essential component of aid to the country and its people.
While taking a moral stance and complying with sanctions was a natural move, the following requests to block accounts owned by Russians raised challenges. On the one hand, crypto markets were avoiding any aid to the military aggression and war effort of Russia. In this context, preventing any money laundering schemes seeking avoidance of sanctions was natural. On the other hand, blocking access to Russians opposing their government and seeking financial refuge in the crypto space raised questions.
Irrespective of the decisions made by the global crypto market, it became evident that its size has resulted in the need to comply with the legislative requirements. At the same time, it is vital to note that the mentioned compliance does not mean the restriction of freedom of the crypto markets. Instead, it means maturity of the sector, playing by the same rules as the financial institutions and markets. The previously implemented KYC and AML procedures were in the same category of requirements, adding security and credibility to the space.
The future remains unknown as the war in Ukraine continues unfolding. However, it is already clear that freedom and independence are commonly shared values amongst many people in the world. These values will continue driving the global crypto market that joined the fight for common ideals and the future.
Mr Kochetov has a profound experience in the financial industry and investment. In 2018 he launched Kyrrex, a crypto-fiat ecosystem that operates Kyrrex Crypto Exchange, as well as a variety of other products and services. He is a firm believer in cryptocurrency and promotes a regulated and safe crypto market through the framework of Kyrrex products.