Coinbase, Binance Refrain from Freezing All Russia-Linked Crypto Accounts Amid Ukraine Crisis

Crypto exchanges are concerned that freezing all Russia-linked accounts could be unfair for innocent Russians.

By Radhika Parashar | Updated: 2 March 2022 16:13 IST

Coinbase, Binance Refrain from Freezing All Russia-Linked Crypto Accounts Amid Ukraine Crisis

Photo Credit: Unsplash/ Art Rachen

Crypto exchanges do not want to unfairly ban innocent Russian investors

Highlights

Coinbase and Binance not ready to cut off all Russian accounts
Crypto exchanges may take action after legal directions
Ukraine continues to get funds via cryptocurrency

Coinbase and Binance are abstaining from blocking crypto accounts which belong to the citizens of Russia. The international crypto exchanges worry that in doing so, innocent Russian investors would have to suffer the consequences during these testing times. Russia waged a war against Ukraine on February 24 amid long-standing geopolitical conflicts. Kyiv, the capital city of Ukraine, along with several other regions, are currently under attack.

Coinbase and Binance, two of the largest crypto exchanges in the world, have not agreed to the requests of Ukrainian authorities asking for a freeze on Russian crypto addresses, a report by Decrypt quoted a Coinbase spokesperson as saying.

“A unilateral and total ban would punish ordinary Russian citizens who are enduring historic currency destabilisation as a result of their government's aggression against a democratic neighbour," the spokesperson said.

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It is noteworthy that amid the ongoing Russia-Ukraine war crisis, the Russian Ruble has crashed, trading at a historic low of $0.0091 (roughly Rs.0.69).

Binance, which claims to be the largest crypto exchange in the world, has also expressed concerns on people expecting a blanket ban on all Russian crypto addresses.

“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 why crypto exists,” CNBC quoted a Binance spokesperson as saying earlier this week.

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Binance is however blocking the accounts of any Russian clients targeted by the sanctions imposed on Russia by the US and other nations as penalties for inciting war violence in its neighbouring nation.

Unregulated and decentralised in nature, cryptocurrencies can facilitate instant cross-border transfer of funds. Crypto transactions are also largely untraceable.

In order to bag emergency funding during these times of crisis, Ukraine has begun accepting donations in cryptocurrency from around the world. Over the weekend, the official Twitter handle of Ukraine posted crypto wallet addresses for donations in Bitcoin and Ether.

Crypto exchanges have argued that if cryptocurrencies can help stranded Ukrainians, it can also come in handy for innocent Russian people who may be struggling because of this war.

Former US First Lady Hillary Clinton has criticised the reluctance from crypto exchanges to freeze Russian wallets.

She urged the US and European governments to “pressure” crypto exchanges into blocking Russian-linked wallets in order to isolate the Russian economy and slowdown the war situation at the least.

Despite all suggestions, US-based crypto app Kraken FX has also decided to not block Russian wallet addresses for the time being. Its CEO Jesse Powell has declined Ukraine's request to do so on Twitter.

Powel said, only if official legal notices are released demanding the freezing of Russian accounts, something could be done from their end.

6/6 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.
/:thread:
— Jesse Powell (@jespow) February 28, 2022

Meanwhile, Ukraine continues to see crypto donations.

The country has collected funds worth over $35 million (roughly Rs. 265 crore) in crypto donations, as per Elliptic.

Earlier, Binance also donated $10 million (roughly Rs. 75.5 crore) to help the ongoing humanitarian crisis in Ukraine.

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Further reading: Coinbase, Binance, Russia, Cryptocurrency, Ukraine, Ukraine Russia War, Russia Ukraine Crisis

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More