In a recent news release by the crypto firms in the United Arab Emirates, there is a monumental increase in the number of requests by Russians looking to liquidate their assets as they seek a safe haven for their fortunes. Reports suggest that Russian clients are investing in real estate in the UAE using cryptocurrency while others are trying to convert their virtual money to hard currency and stashing it at secret locations.
A crypto firm has received several queries in the past two weeks from Swiss brokers asking about the liquidation of billions of dollars worth of bitcoin due to the looming concerns around Switzerland freezing up the assets of Russian clients. An executive remarked that none of these received requests is less than $2 billion. Although none of these requests has been processed yet, this sudden interest amongst Russian clients looking to invest in the UAE is baffling but not unsurprising considering the strict sanctions imposed by the EU on Russia.
Although Switzerland’s market supervisor declined to add words to these speculations, several UAE executives have received queries from Russian individuals looking to sell around 125,000 bitcoins worth $6 billion. However, SECO (State Secretariat for Economic Affairs) asserted in an emailed statement that crypto assets are being subjected to the same sanctions. Therefore, Switzerland is imposing these restrictions on Russian individuals and assets, which is why their crypto assets will also be frozen in the country.
Dubai, a growing economic and financial hub for crypto, has always been an attraction for individuals around the world and UAE’s refusal to side with either the Western allies or Moscow has served as a secret signal for Russians stating that their fortune will be safe there.
A real estate broker who has partnered with a cryptocurrency service to help them buy properties states that a lot of Russians and Belarusians are investing in the Dubai economy using cryptocurrency.
Is investing in UAE a way of sanctions for Russians?
Financial sources in the UAE have confirmed that Russians are buying property in Dubai via cryptocurrency as a way for them to move out of their fortunes in Russia. Although cryptocurrency exchanges agree to block the accounts of Russians sanctioned by the West, they are still in the process of ensuring that crypto is not being used as a tool to evade the sanctions imposed on them and are collaborating with law enforcement agencies for the same. Still, cryptocurrency investments come with a high degree of anonymity and countries like Germany and Estonia are identifying loopholes that could promote sanction busting. However, Western diplomats are alarmed at the accelerated rate of Russians seeking refuge for their fortune in the UAE. However, the UAE’s Foreign Ministry has contemplated that it has a strong commitment to working with the FATF to combat anti-money laundering and counter-terrorism efforts.