Crypto Exchanges Refuse to Freeze Russian Crypto Accounts

Russian Crypto Accounts

Welcome back to the Tribe! In this post we dive into the recent news that Binance and Kraken will not block Russian crypto accounts.

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

Russian Crypto Accounts

Major cryptocurrency exchanges Kraken and Binance have said that freezing the accounts of users in Russia is out of the question. The comments come after Ukrainian officials call for both exchanges to block Russian accounts. However, representatives from Kraken emphasized that a freeze could happen following mounting pressure from legislators.

Binance and Kraken Say No To Blocking Russian Crypto Accounts

As the turmoil between Ukraine and Russia continues, government officials have suggested crypto-focused sanctions in a bid to slow down President Putin’s military operations. Vice prime minister and minister of digital transformation of Ukraine, Mykhailo Federov, asked crypto exchanges and platforms to block Russians from accessing virtual currency services.

Federov also called on exchanges to include users from Belarus in the geoban. However, two major exchanges have responded saying that freezing Russian crypto accounts contradicts the ethos of blockchain technology.

Reuters reported that a Binance spokesperson said that the world’s largest crypto exchange will not freeze millions of innocent users’ accounts unilaterally. The representative added that decentralized technology is underpinned by a philosophy designed to provide greater financial freedom for people across the world.

Chief executive officer of Kraken, Jesse Powell, also weighed in on the issue through a tweet and emphasized that any ban must be facilitated through legal channels. Powell also added that Russian users should not rule out the possibility of restricted access to the platform’s services. An excerpt from Powell’s tweet reads:

“I understand the rationale for this request but, despite my deep respect for the Ukrainian people, Kraken 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.”

Ukrainian Officials Prepare Legal Battle

Following the response from both exchanges, Ukrainian authorities are reportedly moving towards legal demands and official sanctions in a bid to strongarm crypto platforms into freezing accounts belonging to Russian and Belarusian users.

Yulia Parkhomenko, head of the virtual assets expert group at Ukraine’s Ministry of Digital Transformation, disclosed on Monday (February 28, 2022) that the government is preparing letters and appeal to that effect. Parkhomenko tagged the move as a necessary measure as it remains unclear who currently supports the war financially.

Cryptocurrency has been a constant topic of discussion since the situation between both nations escalated shortly after the end of the Beijing Winter Olympics earlier in February. Crypto proponents have surmised that the ongoing geopolitical uncertainty has contributed to high volatility in the crypto market.

Also, several donors from across the globe have also contributed funds in support of the Ukrainian people. Total donations have supposedly crossed over $9 million in cryptocurrencies as of the time of writing this report.