Coinbase announces proactive measures to ensure crypto accounts are not being used to skirt sanctions
One of the most popular crypto trading platforms and exchanges, Coinbase, has so far frozen around 25,000 crypto wallets that are suspected as being linked to Russia.
Wallets with suspected illicit activity in relation to Russian individuals or larger companies have been blocked in a bid to enforce some of the wider sanctions imposed.
These blocks have been put in place to ensure that high risk individuals do not use crypto to evade the heavy sanctions placed upon many Russian affiliated individuals and entities.
The announcement, made by Paul Grewal, Coinbase’s chief legal officer, stated that Coinbase would be complying with the most current guidelines imposed on Russia due to their invasion of Ukraine.
Sanctioned individuals will not have access to their accounts. Coinbase has identified these individuals through the crypto exchanges own “proactive investigations”. They have also shared their findings with the government to help support the enforcement of the new sanctions.
“Sanctions play a vital role in promoting national security and deterring unlawful aggression and Coinbase fully supports these efforts by government authorities.”
Paul Grewal, Coinbase Chief Legal Officer
Crypto Wallets Frozen Do Not Include Average Users
The sanctions are targeting wealthy Russian oligarchs rather than your average Russian crypto user but this still raises some questions from the crypto community in general regarding earlier claims made by various crypto platforms but pressure has been mounting from the authorities to step in.
The US government has asked crypto platforms to assist in blocking these accounts specifically but also being cautious to not shut down all operations in Russia. With the Ruble hitting a new low, and devaluing more and more each day, many normal Russians may turn to cryptocurrency as a much needed alternative.
Historically, during recent conflict periods, many Russian deposit holders have held onto USD in physical form as a means to protect themselves from inflation and currency devaluation, but the availability seems to be limited, and there are now alternatives to consider with crypto. With the risk of having crypto wallets frozen however, there may be more questions than answers in the immediate term.
Brian Armstrong, CEO of Coinbase has moved to reassure users via a tweet stating simply that
“We are not preemptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise”
Brian Armstrong, Coinbase CEO
The move from Coinbase comes as major global payment service providers, such as Visa, Mastercard and American Express have suspended operations in Russia, further isolating Russia’s financial services. The three major cards, if issued outside of Russia, will not work in shops, or cash machines but locally issued versions will remain operational.
As the temperatures and pressure around the globe heats up, and further sanctions roll in relating to the use of Russian oil and gas, it may be quite some time until these frozen crypto wallets finally thaw.
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