Crypto Exchange Sanctions

Welcome back to the Tribe! In this post we dive into what each exchange had to say about the request for sanctions on Russian accounts.

Nothing should be considered investment or financial advice. Enjoy the ride!

Crypto Exchange Sanctions

With recent news causing multiple companies around the world to further sanction Russia, the crypto exchanges have collectively refused to act accordingly. Here is what each individual exchange had to say about these requests. 

Major Crypto Exchanges Refuse To Comply

With heavy sanctions levied on Russia days into its invasion of Ukraine by the US and other allies. Many other entities have also responded in solidarity to the calls for sanctions.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has also responded by cutting off Russian banks from its services. With the banking system down and the plummeting price of the Ruble against the Dollar, cryptocurrencies seem to be the only way out for the country and its embattled citizens.

But, there are calls from both the US and Ukraine for crypto exchanges to block addresses linked to Russian accounts. The question is, how effective has this call been? How are crypto exchanges responding to these calls?

Binance Sanctions

The exchange’s response to this call was partial, it did not agree to fully carry out the sanction. In a statement to CNBC, Binance spokesperson said

“we are not going to unilaterally freeze millions of innocent User’s accounts”.

The rationale for this decision according to the spokesperson was because

“Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason crypto exists.”

So, it would be inhumane to allow innocent users to suffer alongside those who are actual sponsors of the war. As a result of this, the exchange is

“taking the steps necessary to ensure we take action against those that have had sanctions levied against them while minimizing impact to innocent users.”

The spokesperson for Binance continued that

“Should the international community widen those sanctions further, we will apply those aggressively as well,”

Finally, Binance agreed that it would only block the accounts of individuals on the sanctions list and will ensure that they meet all the sanctions in full.

Coinbase Sanctions

The exchange’s response was an unequivocal no. Although, Russia is not one of the 100 countries the exchange offers services to. Coinbase said it will not ban all transactions linked to Russian addresses.

The reason for this stand is that a generalized ban would

“punish ordinary Russian citizens who are enduring historic currency destabilization as a result of their government’s aggression against a democratic neighbor.”

But like Binance, they agreed to restrict the accounts of those on the sanctions list.

Kraken Sanctions

In response to a tweet by Mykhailo Fedorov, the vice prime minister and minister of digital transformation of Ukraine calling on exchanges to block addresses of Russian users.

Jesse Powell, Co-founder, and CEO of Kraken tweeted,

“I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.

Russians should be aware that such a requirement could be imminent.”

He said the legal requirement for such actions could come from the Ukrainian government or from sovereign states like the US as a weapon to turn the Russian populace against their government’s policies. 

He also stated the exchange’s mission 

“Our mission at @krakenfx is to bridge individual humans out of the legacy financial system and bring them into the world of crypto. Where arbitrary lines on maps no longer matter, where they don’t have to worry about being caught in broad, indiscriminate wealth confiscation.”

And this will be defeated if they comply with the call to effect a blanket ban on Russian accounts.

His final tweet shows that the exchange is not ready to carry out such actions.

“Besides, if we were going to voluntarily freeze financial accounts of residents of countries unjustly attacking and provoking violence around the world, step 1 would be to freeze all US accounts. As a practical matter, that’s not really a viable business option for us”.

KuCoin Sanctions

Another crypto exchange, KuCoin also said it won’t carry out a blanket restriction of Accounts linked to Russian users.

In a statement, Johnny Lyu, CEO of KuCoin told CNBC that;

“As a neutral platform, we will not freeze the accounts of any users from any country without a legal requirement. And at this difficult time, actions that increase the tension to impact the rights of innocent people should not be encouraged,”

So like the others, KuCoin is considering the innocent Russians that would suffer if they impose a blanket restriction on Russian accounts

Crypto Exchange Sanctions News

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