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Ukraine Asks Binance, Coinbase, 6 Other Crypto Exchanges to Block Russian Users
Earlier today, U.S. authorities added regulations aimed at thwarting the use of digital currencies and assets to evade sanctions.
Updated May 11, 2023, 5:01 p.m. Published Feb 28, 2022, 9:33 p.m.
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Ukraine's Ministry of Digital Transformation is sending official letters to eight cryptocurrency exchanges, requesting them to stop servicing Russian users because of concerns that digital currencies are being used to evade sanctions.
The ministry is reaching out to Coinbase, Binance, Huobi, KuCoin, Bybit, Gate.io and Whitebit, along with Ukrainian exchange Kuna, according to a list shared with CoinDesk.
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The letters are being sent after Mykhailo Fedorov, Ukraine's vice prime minister and minister of digital transformation, on Sunday night asked all major crypto exchanges to block addresses of Russian users.
Global crypto exchange Binance told CoinDesk that it had no plans to unilaterally ban Russian users from the platform.
"However, we are taking the steps necessary to ensure we take action against those that have had sanctions levied against them while minimizing impact to innocent users. Should the international community widen those sanctions further, we will apply those aggressively as well,” a Binance spokesperson told CoinDesk.
The U.S. Treasury on Monday morning moved to add regulations to thwart the evasion of sanctions by Russians as the country continues its aggression toward Ukraine. The new regulations prohibit the "deceptive or structured transactions or dealings to circumvent any United States sanctions, including through the use of digital currencies or assets or the use of physical assets."
A representative from the Ministry of Digital Transformation in Ukraine told CoinDesk that the letters request the listed cryptocurrency exchanges to halt support for the Russian ruble, ruble spot pairs and fiat gateways, including Russian payment systems. The ministry is also asking the exchanges to block all Russian customers.
In a statement, Coinbase said it won't be instituting any blanket bans on transactions involving Russian addresses, but will block those accounts or transactions that may involve sanctioned individuals or entities. Coinbase said its "mission is to increase economic freedom ... A unilateral and total ban would punish ordinary Russian citizens."
Kraken CEO Jesse Powell expressed similar sentiments last night when explaining why his exchange wouldn't be freezing the accounts of its Russian clientele unless legally required to do so.
A representative from KuCoin sent the following: "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 may increase the tension to impact the rights of innocent people should not be encouraged."
Meanwhile, Michael Chobanian, the founder of Ukrainian crypto exchange Kuna, said Russian users have already been blocked from the platform.
Bybit told CoinDesk it had not been contacted by the ministry. Huobi declined to comment, while Gate.io said is has "no immediate plans to ban any users from a specific country or geography unless being legally required to by regulators." Whitebit has not yet responded to requests for comment.
UPDATE (Feb. 28 22:25 UTC): Adds comments from Coinbase and Kraken.
UPDATE (Mar 1. 10:56 UTC): Adds comment from Kuna.
UPDATE (Mar 1. 14:32 UTC): Adds comment from KuCoin.
UPDATE (Mar 1. 16:10 UTC): Adds comment from Bybit.
UPDATE (Mar 2. 13:19 UTC): Adds comment from Gate.io and Huobi.
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