Ukraine Urges Crypto Exchanges to Bar Russian Users from Their Platforms

Eight cryptocurrency exchanges have been contacted by Ukraine’s Ministry of Digital Transformation in an effort to urge them to block Russian users as concerns arise surrounding the use of digital coins to circumvent sanctions. Coinbase, Binance, Huobi, KuCoin, Bybit, Gate.io and Whitebit, and Kuna have all received official letters sent by Mykhailo Fedorov, Ukraine’s Vice Prime Minister and Minister of Digital Transformation.

“I’m asking all major crypto exchanges to block addresses of Russian users. It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users,” tweeted Fedorov on Sunday. On February 26 — the day prior — Fedorov had also offered compensation for any information they may receive. “Ukrainian crypto community is ready to provide a generous reward for any information about crypto-wallets of Russian and Belarusian politicians and their surroundings. War crimes must be pursued and punished!”

After Russia’s invasion of Ukraine, multiple countries including the United States, Britain, and Canada all issued sanctions on Russia. Since then, certain lenders have had their access blocked to the Society for Worldwide Interbank Financial Telecommunications (SWIFT) payment system which caters to over 11,000 global financial institutions and companies.

On Monday, the U.S. Treasury added regulations to hinder Russians attempting to evade the sanctions by restraining “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.”

In response to Ukraine’s request, however, Binance affirmed that they “are not going to unilaterally freeze millions of innocent users’ accounts. Crypto was meant to provide greater financial freedom for people across the globe.”We’re blocking accounts of those on the sanctions list (if they have Binance accounts) and ensuring that all sanctions are met in full,” added the major crypto exchange.

A Binance spokesperson furthered that they “are taking the steps necessary to ensure we take action against those that have had sanctions levied against them while minimizing impact to innocent users. Should the international community widen those sanctions further, we will apply those aggressively as well.”

Coinbase echoed similar sentiments, affirming that a blanket ban on Russin addresses will not be initiated by the platform. Instead, it will only focus on blocking the accounts of sanctioned individuals or entities. It likewise asserted that the mission of Coinbase is to “increase economic freedom … A unilateral and total ban would punish ordinary Russian citizens.”

Sources: CoinDesk, Reuters