There have been concerns that Russia could use cryptocurrencies to avoid the sanctions imposed on the country by the US and its allies. The Ukraine vice prime minister, Mykhailo Fedorov, had urged all the major cryptocurrency exchanges to freeze the accounts of Russian users.
However, some leading exchanges such as Binance and Kraken have already said that they will not conduct a unilateral ban on all Russian users on the platform. The CEO of Coinbase, Brian Armstrong, has also said the exchange will not halt services to Russian users.
Coinbase will not ban Russian users
The Russian ruble has been plummeting under the pressure of the economic sanctions imposed against the country by the US and its Western allies. Russian residents have been rushing to use cryptocurrencies as a way to shield their savings from the rising inflation. Some have now argued that oligarchs targeted by these sanctions could start using cryptocurrencies.
However, exchanges have refused to ban all Russian users from the platform, saying that a blanket ban would go against the ideals of the crypto sector. The CEO of Coinbase has argued that there is a very slim possibility that Russian oligarchs will rush towards cryptocurrencies.
Blockchain transactions are highly visible and traceable. Every user on that blockchain can see activity on any wallet address. Therefore, Armstrong opined that “trying to sneak lots of money through crypto would be more traceable than using US dollars cash, art, gold, or other assets.”
However, he also added that the exchange would block IP addresses suspected to “belong to sanctioned individuals or entities, just like any other regulated financial services business.”
A blanket ban could be imposed
Armstrong noted that the collapse of the Russian ruble could lead to some investors viewing cryptocurrencies “as a lifeline.” The Russian ruble has dropped by around 30% over the past week. Bitcoin trading volumes have been significantly high in Russia and Ukraine since the invasion started.
However, Armstrong has clarified that a blanket ban could be imposed in the future. In the statement, he added that “if the US government decides to impose a ban, we will, of course, follow those laws.”
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