As the West continues to impose new sanctions on Russian banks following the Russian invasion of Ukraine, the Ukrainian official also called for sanctions against Russian-owned cryptocurrencies.
The Minister of Digital Transformation of Ukraine, Mykhailo Fedorov, took to Twitter on Sunday to call on global crypto exchanges to block the addresses of Russian users.
He stressed that exchanges should not only freeze addresses officially tied to Russia and Belarus, but also “sabotage ordinary users.”
Fedorov later noted that some industry services had already switched to freezing assets from Russia and Belarus, including the DMarket durable token platform.
Funds from these accounts can be donated to military needs. Currently Robin Hood. Bravo,” Fedorov said. He also noted the ongoing actions of social media giant Meta regarding Russia’s attack on Ukraine.
Fedorov’s appeals are potentially catastrophic for the Russian cryptocurrency market, as Russians have owned more than $200 billion worth of cryptocurrencies since the beginning of February.
As the Russian ruble has fallen against the US dollar and euro, Russians are increasingly withdrawing their bank accounts and are apparently considering investing in cryptocurrencies. Thus, BestChange, a major provider of cryptocurrency exchanges in Russia, recorded a 20% increase in traffic after the Russian invasion of Ukraine, a spokesman for Cointelegraph reported.
Leaving Russia could also be a disaster for major global exchanges like Binance, as the Russian market appears to be Binance’s second largest market after Turkey in terms of website traffic.
Binance will not freeze the bitcoin of Russians
Binance has no plans to freeze Russian assets, as this would be contrary to the key principles of financial freedom for cryptocurrencies, a Cointelegraph spokesman said on Monday:
“We don’t want to unilaterally freeze millions of innocent user accounts. Encryption aims to provide more financial freedom to people around the world.”
The spokesperson added that Oslo Børs is implementing measures to enforce sanctions against sanctioned organizations in Russia while “minimizing the impact on innocent users.” “If the international community further expands these sanctions, we will also apply them aggressively,” the spokeswoman added.
Some crypto leaders believe that sanctions against Russia are ultimately inevitable. However, they should only target specific individuals, as the US Office of Foreign Assets usually does.
We believe that sanctions will be inevitable if new sanctioned individuals are named, as the US OFAC/OFAC has done in the past. But banning all crypto companies from offering services to ordinary Russians would make no sense and would do ordinary people more harm than good. ”
Kraken CEO Jesse Powell also said that the Kraken stock exchange will not be able to freeze the accounts of clients of the Russian exchange without a legal requirement. “The Russians must understand that such a demand may be inevitable,” he added. Powell recommended that former Kraken users take cryptocurrencies off exchanges, citing Canada’s emergency law that freezes cryptocurrencies.
The law prompted crypto companies to freeze bitcoin (BTC) wallets in response to local anti-vaccination protests in mid-February.
Although it is not yet clear whether other crypto exchanges will decide to freeze Russian crypto assets, several crypto companies are actively working to support Ukrainian refugees and soldiers.
On Sunday, Binance launched the Ukraine Emergency Relief Fund to provide emergency assistance through cryptocurrency crowdfunding. The cryptocurrency exchange also donated $10 million to help with the humanitarian crisis in Ukraine.
RELATED: Ukraine Accepts Donations in Bitcoin, Ethereum and US Dollars in the Midst of an Ongoing War
Cryptocurrency processor CoinGate also launched a similar initiative by opening a special account to collect donations to support the Ukrainian armed forces. The fundraising effort aims to enable users to donate more than 70 cryptocurrencies by sending funds directly to the National Bank of Ukraine.