Crypto exchange Binance blocks sanctions-targeted Russians, says it will not ban all accounts

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• • Ukraine’s Vice PM on Sunday took to Twitter to ask for information about crypto wallets linked to Russian and Belarusian politicians
• • Russia can leverage cryptocurrency to evade the sanctions - Chainalysis

Binance, the world’s biggest crypto exchange, on Monday, said blocked the accounts of Russian individuals on whom sanctions have been imposed but will not “unilaterally” freeze the accounts of all Russian users.

“We are not going to unilaterally freeze millions of innocent users’ accounts,” a Binance spokesperson for told CNBC.

“Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists.”

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The comments come after Ukraine’s Vice Prime Minister, Mykhailo Fedorov, on Sunday called on all the major cryptocurrency exchanges to block all Russian user accounts.

“It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users,” Fedorov said in a tweet.

Why banning crypto addresses is essential?

Western countries have also banned Russia from using the SWIFT network, a global payment system that connects foreign banks and allows cross-border financial transfers.

The United States and the European Union have imposed sanctions on Russian banks, sovereign debt, Russian President Vladimir Putin’s inner circle, and the leader himself, forcing the Russian Ruble to tumble.

On Monday, the Russian central bank increased its interest rate from 9.5% to 20% as the Ruble hit a record low against the U.S. Dollar.

“As with the traditional financial system, Russia can leverage cryptocurrency to evade the sanctions that are being put in place in response to their invasion of Ukraine,” Caroline Malcolm, Head of International Policy at blockchain analytics firm Chainalysis, told Decrypt last week.

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Binance said it is “taking the steps necessary to ensure we take action against those that have had sanctions levied against them while minimizing impact to innocent users,” but also added that “should the international community widen those sanctions further, we will apply those aggressively as well.”

Jesse Powell, the chief executive of another major crypto exchange, Kraken, on Monday tweeted that the company “cannot freeze the accounts of our Russian clients without a legal requirement to do so.”

Picture Credit: CNBC