Coinbase blocked 25,000 addresses related to Russians.
These users were allegedly engaged in illicit activities.
Coinbase’s CEO recently stated they would comply with the sanctions against Russia.
Amid several monetary sanctions imposed on Russia in light of the Ukraine invasion, there has been much debate around the country’s citizens’ usage of cryptocurrencies.
Following the sanctions, the US-based cryptocurrency exchange Coinbase announced that it blocked access to more than 25,000 addresses related to Russians suspected of engaging in illegal activities.
Coinbase Freezes Russian Wallets
In a blog post shared on March 7 by Coinbase, the company revealed that it is committed to ‘building a safe and responsible financial system that promotes economic freedom.’
Thus, complying with recent sanctions, the organization is developing a multi-layered, worldwide sanctions program.
Furthermore, the firm revealed that it had blocked over 25,000 Russian addresses supposedly linked to Russian individuals or enterprises engaging in criminal activities. The blog post read:
“Today, Coinbase blocks over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our proactive investigations. Once we identified these addresses, we shared them with the government to further support sanctions enforcement.”
Coinbase further highlighted that the Russian central bank alone holds over $630 billion, mostly in immobilized reserve assets. The firm said:
“That’s larger than the total market capitalization of all but one digital asset, and 5–10x the total daily traded volume of all digital assets.”
What’s Next For Russians?
Recent coverage by FXEmpire pointed out that Russian denominated crypto purchases have dropped despite fears that Russians could use cryptocurrencies to evade sanctions.
The drop in crypto transactions in the Russian ruble debunks theories that the country could pivot to digital assets to avoid sanctions.
That said, Brian Armstrong, CEO at Coinbase, said:
“We don’t think there’s a high risk of Russian oligarchs using crypto to avoid sanctions. Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets.”
For now, the recent ban by Coinbase could potentially push Russians to different exchanges such as Binance.
Notably, after Ukraine requested significant crypto exchanges to a complete prohibition, Binance said ‘it would not freeze all Russian accounts.’ This could push BNB’s price if a transition from Coinbase to Binance is seen in Russia.
A Journalism post-graduate with a keen interest in emerging markets across South East Asia, Varuni’s interest lies in the Blockchain technology. As a financial journalist, she covers metric and data-driven stories with a tinge of commentary, and strongly believes in HODLing.