Cryptocurrency trading platform Coinbase says it has blocked more than 25,000 digital wallets it says are linked to “Russian entities or individuals”. Further, the company has shared these addresses with the US government to “support sanctions enforcement.”
US and European Union fear that Russia may use Cryptocurrencies to evade sanctions.
“Russia has had a lot of time to think about this specific consequence”. – says Michael Parker, head of AML and sanctions practice at the Washington law firm Ferrari & Associates.
In a company blog, Paul Grewal, Coinbase’s chief legal officer, said the largest U.S. crypto exchange has banned access for sanctioned individuals and is using blockchain analytics to identify addresses potentially linked to them, which it also adds to an internal blocklist.
Major crypto exchanges including Coinbase and Binance have said they will comply with government mandates to restrict sanctioned individuals, but won’t ban all Russian users. Brian Armstrong, Coinbase’s Chief Executive Officer, earlier said some ordinary Russians are using crypto as a “lifeline now that their currency has collapsed.” Binance founder Changpeng Zhao called crypto “too small for Russia,” citing its extremely low adoption levels.
Russia is increasingly isolated from the larger non-crypto financial system. Among other things, Visa and Mastercard suspended operations in the country over the weekend. Cardholders inside Russia are dependent on Russia’s National Payment Card System.