Tuesday, Jan 31, 2023

Cryptocurrency exchange Coinbase blocks 25,000 Russia-linked wallets

According to Coinbase, the wallet addresses were blocked over fears that cryptocurrency could be used to evade sanctions.

Bitcoin is seen in this picture illustration taken October 19, 2021. (REUTERS)

Cryptocurrency exchange Coinbase has blocked over 25,000 addresses related to Russian individuals or entities that the company believes “to be engaging in illicit activity.”

This development has come weeks after Russia invaded Ukraine. According to Coinbase, the crypto wallet addresses were blocked over fears that cryptocurrency could be used to evade sanctions. The cryptocurrency exchange highlighted that is in full support of 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, Chief Legal Officer at Coinbase wrote in a blog post.

Coinbase noted  that after a user opens an account, it checks provided information against a list of sanctioned individuals or entities provided by US, the UK, European Union, UN, Singapore, Canada, and Japan, as well as blocking users from sanctioned areas such as Crimea, North Korea, Syria, and Iran.

“If someone has opened a Coinbase account and is later sanctioned, we use this ongoing screening process to identify that account and terminate it. Because sanctions evaders often try to mask their identities, Coinbase also proactively works to map transactions beyond the entities and individuals specifically flagged by governments,” Grewal added.

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Just a few days ago,  Brian Armstrong, CEO of Coinbase said shutting down company’s operations in Russia would just hurt ordinary citizens. “We are not preemptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise. Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too,” Coinbase said in a statement.

Meanwhile, Changpeng Zhao, CEO of cryptocurrency exchange Binance told Bloomberg that it is freezing the accounts of Russians targeted by international sanctions. However, the exchange will not keep all Russians from accessing its platform. “Binance follows sanctions rules very strictly. Whoever is on the sanctions list, they won’t be able to use our platform, for whoever is not, they can,” Zhao said in an interview. Expanding restrictions beyond the list of sanctioned individuals would be “unethical for us to do,” he added.

First published on: 09-03-2022 at 11:43 IST
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