Monday, May 20, 2024

Crypto platform restricts 25,000 Russia-linked wallets

Crypto-currency trading platform Coinbase has blocked 25,000 wallet addresses related to Russia, the BBC reports.

The platform said the addresses were related to Russian individuals or entities it believed to have engaged in illicit activity. The addresses were reportedly blocked over fears crypto-currency could be used to evade sanctions.

Coinbase chief legal officer Paul Grewal made the announcement on a company blog. He outlined how the crypto exchange was complying with new rules imposed because of Russia’s invasion of Ukraine.

It means no access for sanctioned individuals and includes “sophisticated blockchain analytics” to identify accounts indirectly linked to banned users.

“Coinbase blocks over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own proactive investigations,” Grewal wrote.

“We shared them with the government to further support sanctions enforcement. Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities.”

The U.S. government had asked crypto platforms to help ensure Russian oligarchs could not use virtual currencies to avoid sanctions.

But many are resisting pressure from both Ukraine’s government and U.S. and European politicians to go further and ban all Russian users, amid concern Russian citizens might be using crypto-currency as a lifeline after the value of the ruble sank to a record low.

Shutting down Coinbase’s operations in Russia would just hurt ordinary citizens, chief executive Brian Armstrong said.

“We are not pre-emptively banning all Russians from using Coinbase,” he tweeted. “We believe everyone deserves access to basic financial services unless the law says otherwise.”

Russia is becoming increasingly isolated from the larger non-crypto financial systems.

Visa, Mastercard, and American Express have suspended all operations in Russia. All three said cards issued abroad would no longer work at shops or cash machines in Russia.

The Russian government downplayed the impact of the suspension, suggesting cards issued by Russian banks would continue to work inside Russia, as transactions could be handled by domestic operators. Some Russian banks, including Sberbank and Alfa-Bank, said they might issue co-badged cards linked to Russia’s Mir and China’s UnionPay international payment systems.

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