Central exchanges (CEX) and executives from companies such as Binance, Coinbase and Kraken have said they will only freeze the assets of Russian clients specifically targeted by Western sanctions, and not the assets of ordinary Russian users.
A few days ago, the Minister of Digital Transformation of Ukraine, Mikhail Fedorov, called on “all major crypto exchanges to block Russian addresses [wallets]” and “also sabotage ordinary users [by freezing their assets].” To explain why he did not ban all Russians beforehand (although Coinbase is not available in Russia), Brian Armstrong, CEO of Coinbase, specifically wrote:
We believe that everyone deserves access to basic financial services, unless otherwise required by law. Some ordinary Russians are using cryptocurrencies as a lifeline now that their currency has collapsed. Many of them are likely to oppose what their country is doing, and the ban will hurt them too. ”
However, Armstrong also stated that “if the US government decides to impose a ban, we will of course follow these laws.” Kraken CEO Jesse Powell confirmed his take on the announcement:
“Kraken cannot freeze the accounts of our Russian clients without a legal requirement. The Russians should be aware that such a demand may be inevitable.”
Non-sanctioned individuals seem to feel the effects of the sanctions even in this case. A day earlier, Binance announced that cardholders of Russian banks under sanctions will not be able to use it on their platform. On Friday, Redditor u/Sammy12xyz addressed the issue faced by Iranian crypto enthusiasts amid calls for CEX to hack Russian clients, stating:
This has already happened with Iranian accounts. We were banned from using Binance for two years and no one told us about it. Aren’t we innocent? ”
Despite these penalties, there are several, albeit limited, ways to circumvent them. As one of the KuCoin moderators wrote:
“Users from Iran can use our exchange, but KYC [know your customer] is not supported. If you wish to proceed without the KYC procedure, you can still perform all functions on our exchange as normal, even if you have not been verified. said there would be a withdrawal limit of 5 BTC per day for unconfirmed accounts.”
Also, the CEX ban on Iranian IP addresses can be bypassed with a VPN. Although an Iranian crypto enthusiast who spoke to Cointelegraph argued that cryptocurrencies such as Bitcoin (BTC) are primarily required to buy VPNs in Iran as these services do not accept paper payments from Iranians due to sanctions.