Coinbase CEO: Crypto exchange ready to comply with U.S. sanctions on Russia

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TL;DR Breakdown

  • Coinbase CEO states readiness to comply with sanctions against Russia if the need arises.
  • Binance and Kraken take a similar stand on economic sanctions.
  • Global governments stand on the watch to stop Russian elites from using crypto as a backdoor to avoid sanctions.

The Ukrainian-Russian geopolitical conflict has destabilized the global economy. Various governments and business entities have implemented sanctions on Russia in the hopes of ending the war. On the other hand, the crypto community remains divided over which sanctions to comply with and enforce.

World government officials are concerned about the possibility of Russia’s plutocrats using cryptocurrency as a back door to get around sanctions. At the same time, Ukraine has significantly benefited from crypto donations. In such times, Ukraine’s Deputy Prime Minister, Mykhailo Fedorov, recently requested major cryptocurrency exchanges to block Russian citizens’ crypto addresses.

Coinbase CEO states Bitcoin is a lifeline for Russians

Following the stringent sanctions, Coinbase Global Inc.’s CEO, Brian Armstrong, said that the exchange took a financial stance. He explained that for now, Coinbase would not ban all Russian users. On the other hand, Armstrong stated Coinbase would comply with sanctions if the United States government decides to place such an expectation on the company.

Despite Western nations’ fears of Russia’s use of cryptocurrencies to avoid sanctions, some Russians are using their Bitcoin (BTC) to assist the Ukrainian people. Following that, on Sunday, the Prosecutor General’s Office of Russia stated that any help provided to Ukrainians by Russians would be considered high treason. Russian citizens stand to face a prison sentence of up to 20 years for such an offense. 

The recent progress in war donations has influenced Coinbase’s decision. The cryptocurrency exchange has established a policy of rejecting transactions from IP addresses that may belong to sanctioned persons or organizations. On the other hand, Armstrong stated that Coinbase would not prohibit all Russians from using Coinbase indefinitely.

Amstrong stated, “if the U.S. government decides to impose a ban, we will, of course, follow those laws.  He also added, “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.” 

Crypto exchanges stand on Russia’s sanctions

Coinbase’s stand is very similar to other trading platforms, such as Binance and Kraken. These exchange platforms have stated that they will not ban all Russian users pre-emptively. However, they express readiness to follow any additional sanctions requirements that may emerge.

According to Armstrong, there’s minimal danger of Russian oligarchs using Bitcoin to circumvent sanctions. The idea is that the open ledger makes it easier to trace money movements than other assets like cash or gold.

On Wednesday, Binance CEO CZ said it would be “unethical” for the Binance platform to limit all Russians. However, other platforms have taken a different stance, and the cryptocurrency situation remains fluid. The cryptocurrency exchanges argued that shutting off Russia would be in direct contrast to Bitcoin’s goal of providing money access independent of government control.

The standoff demonstrates the vast ideological chasm between traditional finance and the cryptocurrency world, based on libertarian ideas and a lack of faith in government.

France’s Finance Minister Bruno Le Maire recently stated that the European Union is “taking actions” to prevent Russia from turning to cryptocurrency to avoid set sanctions. Supreme leaders have reasons to be cautious of the crypto situation in Russia. It is undoubtedly true that governments have used cryptocurrencies to circumvent international sanctions in the past. North Korea recently launched ransomware attacks to gain significant quantities of cryptocurrency.

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