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Crypto Exchanges Soon Could Be Forced to Block Russian Users

Source: Adobe/Alex White

 

In the aftermath of the Western sanctions on Russia due to its invasion of Ukraine, crypto exchanges could be soon required to freeze the accounts of their Russian customers, according to Kraken CEO Jesse Powell. 

He was replying to a recent request put forward by Ukrainian Deputy Prime Minister and Digital Transformation Minister Mykhailo Fedorov who called on the world’s major crypto exchanges to block Russian users from using their services.

“I understand the rationale for this request but, despite my deep respect for the Ukrainian people, [Kraken] cannot freeze the accounts of our Russian clients without a legal requirement to do so,” Powell said

“Russians should be aware that such a requirement could be imminent,” he added.

Powell recognized that such requirements could be imposed on crypto exchanges by countries for various reasons, for instance, to thwart anti-government protests, or turn populations against the regimes that rule their countries.

Kraken’s mission is “to bridge individual humans out of the legacy financial system and bring them [into] the world of crypto, where arbitrary lines on maps no longer matter, where they don’t have to worry about being caught in broad, indiscriminate wealth confiscation,” he said. 

In Powell’s opinion, if Kraken were to freeze all accounts of residents of countries engaged in unjust military conflicts, the exchange would need to bar US users from using its services.

Meanwhile, per Fedorov, “it’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”

At the same time, the Ukrainian official praised NFT and digital item marketplace DMarket for its decision to freeze the accounts or users from Russia, and also Belarus which collaborates with the Kremlin on the invasion.

Meanwhile, the deputy prime minister’s request has been criticized by some industry observers. Alex Gladstein from non-governmental organization Human Rights Foundation commented that Fedorov’s statement was “bizarre and cruel,” as Russians under Putin’s “tyranny will have no choice but to turn to BTC and Tether.”

As reported today, Google Trends data shows that both tether (USDT) and bitcoin (BTC)-related searches are on the rise in Russia.

Another Twitter user, @GaetanDella, tweeted that “freezing not only politicians’ wallets but also civilians could be really detrimental for crypto’s future.”

“Another reminder of why owning your keys, being your own bank, and decentralization are important,” added @panosmek.

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Learn more: 
Russians Ditch Ruble, Central Bank Scrambles as Fiat ‘Destruction’ Looms 
Crypto Donations to Ukraine Near USD 20M 

Bitcoin, the Ukraine Crisis and the Central Bankers Dilemma 
Bitcoin Fundamentals vs. Fundamentals of Geopolitics – Analysts on Ukraine War

Canada Tests New Measures on Freezing Crypto Funds
Canadian Regulator Reports Coinbase, Kraken CEOs’ Crypto Custody Tweets
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(Updated at 10:44 UTC with a tweet.)

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