A hot potato: Coinbase, Binance, and Kraken, three of the world’s largest cryptocurrency exchanges, are joining others in refusing requests by Ukraine to freeze all Russian users’ accounts. While the companies have frozen the accounts of those targeted by sanctions, they will not implement a universal block on Russian accounts.
On Sunday, Ukraine’s Vice Prime Minister Mykhailo Federov tweeted a plea for all major crypto exchanges to block addresses of Russian users. “It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users,” he wrote.
I’m asking all major crypto exchanges to block addresses of Russian users.
It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.
— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022
Fedorov is also offering a “generous reward” for information on digital wallets held by Russian and Belarusian politicians.
Ukrainian crypto community is ready to provide a generous reward for any information about crypto-wallets of Russian and Belarusian politicians and their surroundings. War crimes must be pursued and punished! To share info please contact in Telegram: https://t.co/XHidwUQ8bE.
— Mykhailo Fedorov (@FedorovMykhailo) February 26, 2022
A spokesperson for Binance told CNBC, “We are not going to unilaterally freeze millions of innocent users’ accounts.”
“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.”
Binance also says it will donate $10 million towards humanitarian efforts in Ukraine and is launching a “crypto-first” crowdfunding site to raise a further $20 million.
The US, UK, Europe, and Canada have all responded to the invasion of Ukraine with a slew of sanctions against Russian banks, oligarchs, politicians, and more. While the big crypto exchanges have frozen the accounts of sanctioned users, the firms are refusing to take the same action against all Russians.
“A unilateral and total ban would punish ordinary Russian citizens who are enduring historic currency destabilization as a result of their government’s aggression against a democratic neighbor,” Coinbase told Motherboard.
Another large exchange, Kraken, said that it could not freeze the accounts of its Russian users without a legal requirement to do so. Kraken exchange CEO Jesse Powell said such a move would violate the company’s “libertarian values.”
Johnny Lyu, CEO of KuCoin, has a similar view: “As a neutral platform, we will not freeze the accounts of any users from any country without a legal requirement. And at this difficult time, actions that increase the tension to impact the rights of innocent people should not be encouraged.”
Bitcoin’s price has surged back up to above $43,000 this week after losing almost $10,000 of its value in the wake of the crisis.