Ukraine Seeks to Cut Off Crypto Access for Russians and Belarusians
The Ukrainian official called for the widespread restrictions in a statement via Twitter on February 27, following Russia’s invasion of Ukraine a few days earlier. According to Fedorov
“It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”
Russia’s attack on Ukraine has attracted international outrage along with numerous economic sanctions. The European Union, along with several Western countries (such as the United States), moved to disconnect select Russian banks from the international payments system, Society for Worldwide Interbank Financial Telecommunication (SWIFT).
There were more reports that the Biden administration is “in the early stages” of exploring further sanctions on Russia’s crypto activity. According to the Wall Street Journal, one possible reason for targeting cryptocurrency was to prevent the Russian government from using crypto to circumvent economic sanctions.
Binance, Kraken Refuse to Freeze Russian Accounts
Meanwhile, some major cryptocurrency exchanges have responded to Fedorov’s statement, stating that they would not arbitrarily ban Russian users.Jesse Powell, CEO of Kraken, in a tweet thread said that the exchange platform cannot Block accounts of its Russian clients without a legal requirement. However, the Kraken CEO added that
“Russians should be aware that such a requirement could be imminent.”
Binance, the world’s largest cryptocurrency exchange by trading volume, stated that the platform was “not going to unilaterally freeze millions of innocent users’ accounts.” But the exchange elaborated:
“However, we 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.”
Johnny Lyu, the CEO of cryptocurrency exchange KuCoin, told CNBC that the company has no plans to freeze accounts of users from any country. According to Lyu, it is not proper to carry out actions that would heighten existing tensions and affect innocent individuals.
Conversely, the non-fungible token (NFT) platform DMarket, announced that it has terminated relationships with Russia and Belarus. In addition, the NFT platform said that it froze accounts of customers from both countries and prohibited the new registration of users in those regions.
Ferdovo later praised DMarket’s actions stating, “Funds from these accounts could be donated to the war effort.”
Ukraine Raises Over $20 Million in Crypto
While crypto exchanges seem reluctant to freeze accounts from Russia and Belarus, they have donated to aid Ukraine. Binance announced on February 27 that the company would donate $10 million towards Ukraine’s humanitarian effort.
The platform also launched the Ukraine Emergency Relief Fund, a crowdfunding site where users can donate cryptocurrency to provide emergency relief to refugees and children. So far, a total of 151.11 BTC ($6.2 million) have been donated.
Earlier, Sam Bankman-Fried, FTX CEO, said that the company gave $25 to each Ukrainian user on the exchange.
According to blockchain analytics firm Elliptic, the government of Ukraine has raised a total of $22.2 million in crypto, consisting mostly of Bitcoin and Ethereum, followed by stablecoin USDT. Most of the donations poured in after the Ukrainian Vice Prime Minister called for support from the crypto community.