Coinbase Says It’s Blocking 25,000 Russian-Linked Crypto Addresses

Coinbase says it currently blocks 25,000 cryptocurrency addresses linked to Russian individuals or entities, defending itself against claims that Russia could evade sanctions with crypto. In a blog post published yesterday, Chief Legal Officer Paul Grewal explained how the financial exchange is complying with new rules imposed amid the ongoing invasion of Ukraine. This includes using “sophisticated blockchain analytics” to identify accounts that are indirectly linked to banned users.

Coinbase said the 25,000 blocked accounts were “linked to Russian individuals or entities that we believe are engaged in illicit activities.” He didn’t say exactly when they were blocked or how many restrictions were linked to the current sanctions — in one example, for example, Coinbase cited a 2020 sanction against a specific Russian national with 1,200 potentially linked accounts.

“Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities,” Grewal said. While crypto wallets can be anonymous and don’t require dealing with traditional banks, he points out that transactions are “traceable, permanent and public” – which can potentially make it easier to crack down on illicit accounts, preventing them from buying or to sell. cryptocurrency through a service like Coinbase. “Digital assets have properties that naturally deter common sanctions-busting approaches.”

US lawmakers have questioned whether cryptocurrency companies are following sanctions against Russia. Four senators, including Elizabeth Warren (D-MA), sent a letter last week urging Treasury Secretary Janet Yellen to outline plans to enforce compliance.

Crypto firms were quick to disagree with the analysis, downplaying the value of digital currency for large-scale illicit transactions. Binance founder Changpeng Zhao called the crypto “too small for Russia”, citing its extremely low adoption levels. “The Russian government and other sanctioned actors would need virtually unobtainable amounts of digital assets to meaningfully counter current sanctions,” Grewal wrote. (So ​​far, the sanctions do not require blocking ordinary Russian citizens, despite Ukraine’s pleas to extend them.) Conversely, they pointed to Ukraine’s extensive crypto fundraising operations , which had raised approximately $54 million as of the end of last week.

Russia is increasingly isolated from the broader non-cryptographic financial system. Among other things, Visa and Mastercard suspended operations in the country over the weekend, leaving cardholders inside Russia dependent on Russia’s national payment card system.


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