BRUSSELS, BELGIUM – Punitive economic sanctions became a permanent feature of Western hegemony since the inception of the U.S Treasury Standard, which achieved full dominance during the last quarter of the 20th century. Typically emanating from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). Sanctions have been used to nudge, threaten and coercegovernments around the world into adopting economic policies favoring Western corporate and geopolitical interests, which largely revolve around maintaining the onerous monetary policy.
Since the start of the new century, these weapons of economic warfare have been used more and more frequently, with other Atlanticist powers in Europe imposing their own sanctions on disobedient trading partners or joining with the US/UK policy axis on broader destabilization operations. In addition, the World Bank and the International Monetary Fund (IMF) – the two main facilities of the U.S. Treasury Standard – also play their part by either levying their own sanctions or withholding funds from nations under sanctions by the United States and other international entities.
Central banks are a crucial cog in this game as well. However, much of it centers on setting fiscal policy rather than any direct involvement in sanctions enforcement. At least, this was the case until Wednesday, when the rumors that Russian banks would be cut off from SWIFT – the largest interbank payments messaging system – became a reality.
SWIFT, which stands for Society for Worldwide Interbank Financial Telecommunication, is a private consortium owned by the world’s ten largest banks and financial institutions, whose representatives sit on the boards of central banking entities like the U.S. Federal Reserve. Although membership is voluntary, SWIFT has a tight grip on the financial communications systems of commercial banking operations across the world, as well as a strong presence inside the accounts payable departments of major corporations like General Electric and Microsoft.
If you have ever tried to transfer money from your bank account to a bank in another country or simply sent a bank-to-bank payment, chances are you were asked to produce a SWIFT code, which is an 8 to 11-digit code attached to the transaction. This unique number and character combination tracks your payment through the SWIFT messaging system, which provides details of the transaction to the receiving bank, such as the sender’s information and other data required by the standardized (ISO) security and payment clearing protocols member banks must follow.
Most of the activity that occurs in the SWIFT system happens between banks themselves, and has little to do with the general public or individual bank account holders. But, since the advent of FinTech services, the cross-border payments space historically dominated by SWIFT, has seen the influx of a plethora of alternative transaction methods.
By virtue of the cashless nature of many of these startups, like PayPal, Square and others, payment settlement times, or the time it takes for a payment to clear and become available to the receiving party, can be faked – an illusion that is critical for the success of these new platforms. In other words, payments through these apps can appear instantly on the users’ balance, while the actual settlement process continues behind the scenes, which can often take days to complete. Part of these processes are related to security procedures, such as verification of the sender’s identity.
These systems are being replaced by so-called “trustless” systems based on blockchain technology, where encryption keys are used to append data to a digital ledger, eliminating the need for human-based verification procedures. This is also the same technology that is at the heart of cryptocurrencies, whether in the form of Bitcoin or Central Bank Digital Currencies (CBDC).
Political Animals
Transitioning from a cash-based economy to a digital money paradigm is a political project. It requires buy-in from multiple state and social actors, whose interests rarely align. As a result, adoption is often predicated on exerting the right kind of political pressure in order to force the issue. In the case of SWIFT’s action against the seven Russian banks, it is inevitable that these financial institutions will seek out alternatives like China’s Cross-Border Interbank Payment System (CIPS).
However, CIPS itself uses the SWIFT standard, which belies much of the sensationalist media coverage over the matter, and reinforces the reality of SWIFT’s central role in shepherding the transition to digital currency systems, making sure the ISO standards that govern interoperability across the hardware and software tools that underlie the emerging machine-based financial systems, remain intact.

In 2017, the consortium introduced a new API-based digital messaging system, called SWIFT gpi (Global Payments Innovation), which is already used by 3,700 banks worldwide. It is designed as a bridge system and to compete with the speed offered by the FinTech startups in the payments space. But, to be sure, SWIFT is in no danger of losing its grip on the backend operations of the banking industry, even as it undergoes a major disruption.
Shutting down SWIFT in the Russian banks is an unprecedented move that adds another layer to the sanctions regime, and captures a lot of headlines, similar to the situation unfolding in Canada, where Trudeau’s government temporarily froze the bank accounts of several dozen individuals over their participation in the so-called “Freedom Convoy”, and sold thousands of people on the concept of cryptocurrency as a potential hedge against such a scandalous government overreach.
Putin’s war in Ukraine is creating even more political pressure for the adoption of cryptocurrencies under the guise of a “collapse” of fiat money; a narrative that has been aggressively pushed by many so-called alt-media channels over the past few years, and which has been enthusiastically embraced by Ukrainians, where highly corrupt financial and political institutions have driven the population to rely on cryptocurrencies and become the fourth largest contingent of digital currency users in the world.
Indeed, Ukraine is at the vanguard of the digital transition. Last September, the Ukrainian Parliament attempted to legalize Bitcoin, but was vetoed by President Zelensky. On Thursday, the former comedian changed his mind and cryptocurrencies were legalized in Ukraine, which according to the deputy minister of the country’s fledgling Ministry of Digital Transformation, intends to “become one of the top jurisdictions in the world for crypto companies” – a vision shared by the State of Texas and El Salvador. Michael Chobanian, the Ukrainian founder of a Bitcoin exchange, expressed the reality succinctly, when he told the New York Times that banks “have been very good at creating demand for [the exchange’s] services”.
While “fiat” is certainly on its way out, the rumors of its death have been greatly exaggerated, since its demise is being carefully managed, and the transition into a full-fledged digital money paradigm is slowly-but-surely taking place under the auspices of the very same central banking powers, who are shifting towards a “decentralized” model, which ironically offers far greater levels of control through programmable money, smart contracts and other features of the brave new cybernetic world and concomitant data economy.
Crowdfunding War and Lies
Ukraine has been developing its own CBDC since 2016. Yakiv Smolii, the governor of Ukraine’s central bank, considers “blockchain as the next step in evolution of transactions technologies, which will become more popular and widespread during the next decades”.
The war, aided by massive amounts of anti-Russian propaganda from the West, has been a huge boost to cryptocurrencies, particularly Bitcoin, which along with Ethereum (ETH) – whose founder, Vitalik Buterin, is Russian –, have been the cryptocurrencies of choice, for the millions collected so far in several crowdfunding campaigns and other initiatives supporting the Ukrainian military.
Sam Bankman-Fried, the founder of FTX crypto exchange, announced on Twitter that his company gave each Ukrainian client $25 on the same day Russian bombs began falling in the country. Bankman-Fried’s support for the Ukrainian cause, whose company also recently paid $135 Million for the naming rights of the NBA’s Miami Heat arena, is revealing considering FTX’s suspected role in Bitcoin price manipulation, and the fact that Ukraine hosts some of the world’s Bitcoin “whales”, with several large Bitcoin holders among its own government officials.

On July 26, 2021, a Bitcoin short squeeze that led to more than $1 Billion in liquidations, raised alarm bells in the world of cryptocurrency traders and financial observers. In a searing, yet highly technical, dissection of that day’s market activity, data scientist Matt Ranger, traced the origins of the short squeeze, which caused the spike in the price of Bitcoin and cash out opportunity, to strategically placed buy and sell orders by FTX.
Demonstrating the incestuous relationship between crypto markets and corrupt media practices, Ranger shows how a misleading article about Amazon’s search for a “Digital Currency and Blockchain Product Lead” by Business Insider (BI) was used to spark the market craze. Over the course of 36 hours following the publication of the original article, BI ran multiple versions of the story with different headlines, progressively upping the ante about Amazon’s commitment to Bitcoin, with the last story suggesting that Amazon would soon accept crypto as payment on their e-commerce platform.
Finally, the inciting event occurred when CityAM, a London-based business publication that caters to cryptocurrency traders, published an article citing an unnamed source from Amazon itself confirming that the e-commerce giant was on the verge of accepting “Bitcoin payments and token”, which is then amplified by CoinTelegraph and other outlets targeting the same demo. Armed with the order book of the trading day in question, Ranger is able to pinpoint every step of the fraud and FTX’s artificial price pump activities to the second.
Reality Management
Comparing the headlines published in relation to cryptocurrency and the war in Ukraine, a difference in tone becomes readily apparent. Whereas Russia is portrayed as the scofflaw that is looking to circumvent international sanctions by using cryptocurrencies, Ukraine is on a hero’s journey and availing itself of Bitcoin and other cryptos to enhance its defenses, literally.
According to CNBC, “cryptocurrencies such as bitcoin have emerged as an important alternative funding method, since they allow for quick, cross-border donations”, and account for at least $4.1 million in donations to the Ukrainian army. That figure was more than doubled in an article published the following day by The Verge, which also highlights numerous other efforts to use cryptocurrencies and even NFTs for the war effort.
An official list of cryptocurrency donation vehicles has been made available by the Ukrainian government, and overseen by its brand new Cyber Unit, which is run by a former Fermi Lab research scientist and is partnered with the National Bank of Ukraine, Cisco and Bankman-Fried’s FTX, among others.
Meanwhile, the New York Times published an article titled Russia Could Use Cryptocurrency to Blunt the Force of U.S. Sanctions, where it went into great detail about the “many cryptocurrency tools [Russians have] at their disposal to evade sanctions, including a so-called digital ruble and ransomware”. The piece highlights a Russian dark net cryptocurrency marketplace called Hydra, which specializes in synthetic drugs and operates all over Eastern Europe.
Citing a report by the cryptocurrency research firm Chainalysis, the NYT, paints a picture of shadowy and nefarious activity surrounding Russian uses of cryptocurrency, despite admitting that the article’s main thesis – namely that Russia could use Hydra to evade sanctions –, is unlikely. It also is worth mentioning that Chainalysis’ report was funded by Cisco.
Another outfit that has issued reports about Hydra is a non-profit called Ciphertrace, which claims to be the “The World’s First Blockchain Forensics Team” and receives its funding directly from the U.S. Department of Homeland Security (DHS). Its founder and CEO, Dave Jevans, was an “early cypherpunk” – ostensibly a member of the notorious mailing list where the pioneers of Bitcoin exchanged their ideas. Jevans’ co-founder Shannon Holland was an early “Bitcoin miner”. Both started their careers at Apple, which Zelensky has recently asked to stop providing its products to Russia.
Democratizing Corruption
Cryptocurrencies and blockchain technology, in particular, offer unprecedented levels of social control and a way to weaponize all of the surveillance technologies that already surround us. In some ways, it can be described as nothing less than the “democratization” of the sanctions regime.
Just a few days ago, the Vice Prime Minister of Ukraine and Minister of Digital Transformation, Mykhailo Fedorov, tweeted out a chilling message, that should make anyone think twice about embarking down the road to digital serfdom. Addressing “all major crypto exchanges”, Fedorov asserted that it was ” crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”

In another tweet, he announced a bounty from the “Ukrainian crypto community […] for any information about crypto-wallets of Russian and Belarusian politicians and their surroundings,” and exhorted readers to contact the agency directly via Telegram after calling for “war crimes” to be punished.
Economic sanctions are often cloaked behind a shield of human rights and other matters divorced from the economy itself, relying heavily on public opinion shaped by the enormous Western media apparatus, which often front-runs official announcements with stories designed to paint the target nation or individual in the worst possible light. This promotes the idea of a moral high ground held by the sanctioning country, and moves the spotlight away from the actual goals or purpose behind the sanctions.
In our present environment of 24/7 information warfare, and financial markets tethered to manufactured news cycles, cryptocurrencies are a doorway to a world infinitely more dystopian and cruel, where the ideals of people like Hartej Sawhney are uplifted. The New Jersey-born co-founder of a crypto auditing firm finds Ukraine’s endemic corruption charming: “Here,” Sawhney says, “we get to play the game that only elites in the U.S. play. I don’t need a lobbyist. I need to pay someone at the border, I can. I need to pay politicians, I can.”