Cryptocurrency trading platform Coinbase says it’s currently blocking 25,000 cryptocurrency addresses linked to Russian people or entities. This comes after allegations that crypto could be used by Russian leaders and businesses to evade the massive sanctions placed on the country after the invasion of Ukraine.
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In an announcement by Chief Legal Officer Paul Grewal, the company has explained how the financial exchange is complying with new rules imposed. That includes using “sophisticated blockchain analytics” to identify accounts that are indirectly linked to banned users.
“Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities,” said Grewal. While crypto wallets can be anonymous and don’t require dealing with traditional banks, he points out that transactions are “traceable, permanent, and public” — which can potentially make it easier to crack down on illicit accounts, preventing them from buying or selling cryptocurrency through a service like Coinbase. “Digital assets have properties that naturally deter common approaches to sanctions evasion.”
The 25,000 blocked accounts are “related to Russian individuals or entities we believe to be engaging in illicit activity.” It didn’t comment on what the blocking of these accounts meant for regular individuals or how things could change in the future.
Most of the crypto community have pushed back against the condemnation of the technology in a situation like Russia and Ukraine. Binance founder Changpeng Zhao called crypto “too small for Russia,” citing its extremely low adoption levels. “The Russian government and other sanctioned actors would need virtually unobtainable amounts of digital assets to meaningfully counteract current sanctions,” wrote Grewal. Conversely, they’ve pointed to Ukraine’s extensive crypto fundraising operations, which had raised approximately $54 million as of late last week.
Many expect crypto adoption to increase in Russia as the country is being excluded from the traditional financial systems around the world due to sanctions.
