Matt Hancock has swooped to the defence of crypto amid concerns digital assets are allowing Russians to circumvent sanctions.
The UK’s former health secretary has penned a crypto-positive foreword for a report investigating the use of digital assets for sanctions evasion amid the conflict between Russia and Ukraine.
The report was commissioned by the Digital Economy Institute, a think tank due to launch in the coming weeks which was set up by the lawyer Ijeoma Okoli and Helen Thomas, a former advisor to George Osborne who helped Hancock write the book Masters of Nothing.
“The fear of use of cryptocurrency to avoid sanctions has dominated popular debate about them since the invasion,” commented Hancock. “However, this fear is misplaced.”
“Due to its traceability and digital ledgers, cryptocurrencies are more fit for purpose than fiat money when it comes to preventing and capturing criminal behaviour,” Hancock said, arguing that “the same applies to sanctions.
UK financial regulators including the Financial Conduct Authority and Bank of England have raised concerns about the use of crypto to undermine sanctions, recently issuing a joint statement reminding Britain’s crypto industry of its obligations to thwart illicit activity.
Several hundred thousand crypto wallet addresses have been linked to sanctioned individuals in Russia according to research firm Elliptic.
However, Hancock said that the transparency of blockchain technology can increase prosecutions and discourage criminal activity provided the sector is regulated effectively.
“Crypto, like all other forms of innovation can be a force for good, but only if we provide the right structure for it to be used in the right way,” Hancock said, pointing out that Ukraine’s government has raised tens of millions of pounds worth of donations in crypto since the Russian invasion began.