Popular Crypto Exchanges Reject Ukraine's Request For A Unilateral Russian Account Ban
The United States and other countries are imposing harsh sanctions on Russia, in response to the country’s invasion of Ukraine. Some of these sanctions target Putin specifically, as well as other Russian and Belarusian politicians and oligarchs. Amidst these sanctions, the Ukrainian vice prime minister has called for cryptocurrency exchanges to block all Russian users, rather than targeting specific entities named in the sanctions.
I'm asking all major crypto exchanges to block addresses of Russian users.
— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022
It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.
However, most major cryptocurrency exchanges have decided to fully comply with the sanctions by blocking individual accounts associated with those named in the sanctions, but not to block all Russian users across the board. These exchanges include Binance, Coinbase, Kraken, FTX, and KuCoin. A Coinbase spokesperson told Motherboard, “A unilateral and total ban would punish ordinary Russian citizens who are enduring historic currency destabilization as a result of their government’s aggression against a democratic neighbor. We remain vigilant as this invasion evolves and are deeply committed to playing our part.”
In a statement to CNBC, a spokesperson for Binance said, “We are not going to unilaterally freeze millions of innocent users' accounts. Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people's access to their crypto would fly in the face of the reason why crypto exists.” Binance also announced that it has launched a fundraiser and has committed to donate a minimum of $10 million to organizations providing humanitarian effort in Ukraine.
Meanwhile, Dmarket, an NFT and virtual in-game item platform based in Ukraine has banned Russians and Belarusians from registering accounts and has frozen the accounts of those already registered.
In a statement to CNBC, a spokesperson for Binance said, “We are not going to unilaterally freeze millions of innocent users' accounts. Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people's access to their crypto would fly in the face of the reason why crypto exists.” Binance also announced that it has launched a fundraiser and has committed to donate a minimum of $10 million to organizations providing humanitarian effort in Ukraine.
Meanwhile, Dmarket, an NFT and virtual in-game item platform based in Ukraine has banned Russians and Belarusians from registering accounts and has frozen the accounts of those already registered.
Cryptocurrency exchanges complying with the sanctions against Russian, Belarusian individuals and entities without banning all Russian users, are doing so at the urging of American officials. The White House’s National Security Council and the Treasury Department are working with US-based exchanges as part of the administration’s larger sanctions effort.
According to Politico, the chance that the Kremlin might try to move money around the sanctions by way of cryptocurrency is not a big concern for Treasury officials. The counselor to the deputy Treasury secretary, Todd Conklin, stated that, given “the scale of what they have to move, and where they have to move things from, [crypto’s] not necessarily going to be that concerning.” The volume of money that would need to be moved would cause a major spike in the cryptocurrency market, drawing the attention of blockchain investigators who could trace the flow of money on public ledgers. The Department of Justice and FBI have repeatedly demonstrated the US government’s proficiency at tracing and seizing illicit cryptocurrency, including in cases involving Russians.
According to Politico, the chance that the Kremlin might try to move money around the sanctions by way of cryptocurrency is not a big concern for Treasury officials. The counselor to the deputy Treasury secretary, Todd Conklin, stated that, given “the scale of what they have to move, and where they have to move things from, [crypto’s] not necessarily going to be that concerning.” The volume of money that would need to be moved would cause a major spike in the cryptocurrency market, drawing the attention of blockchain investigators who could trace the flow of money on public ledgers. The Department of Justice and FBI have repeatedly demonstrated the US government’s proficiency at tracing and seizing illicit cryptocurrency, including in cases involving Russians.
