In cooperation with the sanctions being imposed on Russia, Coinbase revealed that it had banned 25,000 crypto accounts linked to Russian owners.
The move is also more of a safeguard because there were already speculations that the country could evade sanctions using cryptos. In a blog post titled ‘Using Crypto Tech to Promote Sanctions Compliance,’ Chief Legal Officer at Coinbase Paul Grewal explained where the crypto exchange platform stood on the matter.
“In the past few weeks, governments around the world have imposed a range of sanctions on individuals and territories in response to Russia’s invasion of Ukraine. Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities. Sanctions are serious interventions, and governments are best placed to decide when, where, and how to apply them,” the blog post reads.
However, it is important to note that the blocked accounts don’t belong to ‘ordinary Russian citizens.’ Coinbase claimed to have used its blockchain analytics to identify and block specifically sanctioned actors, detect attempts at evading sanctions and identify high-risk behaviour.
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Along with Binance, it has also disagreed that the Russian government could use crypto to conduct illicit transactions on a great scale. Both crypto giants agree that the market is still too small to have any significant effect on sidestepping the economic sanctions that tech institutions are piling on it.
It is unclear how crypto expects to be seen as a non-compliance industry if traditional financial rules still apply. But, Grewal had attempted to explain it this way:
“No compliance program is perfect, including ours. But to play our part in these critical economic sanctions, Coinbase implements a multi-layered, global sanctions program.”
What do you think? Are there limits to ‘no compliance,’ as Russia’s case shows us?
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