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Ukraine Asks Binance, Coinbase, 6 Other Crypto Exchanges to Block Russian Users

It’s not news anymore that the world stands aloof, owing to the ongoing war between Ukraine and Russia which some pre-empt to be the next World War (III). Just recently, Ukraine’s Ministry of Digital Transformation sent letters to eight cryptocurrency exchanges, requesting them to stop servicing Russian users due to concerns that digital currencies are being used to evade sanctions.

 From the request made, the Ministry of Digital Transformation told the Cryptocurrency exchange platform that it should also include halting its support for the Russian ruble, ruble spot pairs, and fiat gateways, including Russian payment systems. This will in turn lead to restricting all Russian customers from using the platforms in the long run. According to a list shared with Coinbase, the list includes Coinbase, Binance, Huobi, KuCoin, Bybit, Gate.io, and Whitebit, along with Ukrainian exchange Kuna.

Russia has defied the West, but can it put DeFi to the test? 

With Biden’s administration sanctions aiming at Russia’s “corrupt” elites and their families for which there has been no direct pointer or mentioning of crypto specifically, there’s a growing call to oust Russia from SWIFT, the global payments network that processes around $5 trillion a day, which holds uncertainty over whether the move could backfire. 

Access to crypto could, in theory, soften the blow of these penalties which could blow out like fire but it’s most likely however that the Russians will lean on crypto to circumvent global sanctions which is increasingly strangling its economy. This seems so possible, taking a look at the recent action in Canada where it sanctioned crypto wallets used by backers of the trucker convoy and the Department of Justice’s recent seizure of $3.6 billion in stolen bitcoin. Russian crypto holders might find themselves similarly vulnerable, especially as they try to cash out their coins.

Binance Platforms Respond to the Clarion Call

After receiving the request, Global crypto exchange Binance told CoinDesk that it had no plans to unilaterally ban Russian users from the platform but notwithstanding, it is taking the steps necessary to ensure that action is taken against those that have had sanctions levied against them while it seeks to minimize the impact this will have on innocent users. Furthermore, Binance stated that in a situation where the international community widens the sanctions, it will have no choice but to respond aggressively.

Coinbase and Kraken took its turn

Taking a toll after Binance, Coinbase disclosed in a statement that it won’t be instituting any blanket bans on transactions involving Russian addresses, but will block those accounts or transactions that may involve sanctioned individuals or entities. Coinbase further said that its mission is to increase economic freedom which implies that if it embarks on a unilateral decision of such magnitude, it will in turn affect the mass populace of other innocent Russian citizens.

Going further, Kraken CEO, Jesse Powell expressed similar sentiments, explaining why his exchange wouldn’t be freezing the accounts of its Russian clientele unless legally required to do so. In lieu of this, however, the U.S. Treasury on Monday morning moved to add regulations to thwart the evasion of sanctions by Russians as the country continues its aggression toward Ukraine. The new regulations prohibit the “deceptive or structured transactions or dealings to circumvent any United States sanctions, including through the use of digital currencies or assets or the use of physical assets.”

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