JAKARTA – A number of the largest crypto exchanges from South Korea are planning to block users from Russia as an act of protest against the military invasion of Ukraine. In response to the move, CEO of crypto exchange Coinbase Brian Armstrong expressed his views on user rights.
Armstrong confirmed that Coinbase did not ban Russian users on its platform. He believes that everyone has the right to access crypto as well as financial services.
"We believe everyone deserves access to basic financial services unless the law says otherwise," Armstrong said.
Earlier, Ukrainian Deputy Prime Minister Mykhailo Fedorov urged various crypto exchanges to block users from Russia. This was conveyed by Fedorov via Twitter last February.
“It is imperative to freeze not only addresses associated with Russian and Belarusian politicians but also to sabotage ordinary users,” Fedorov wrote.
However, the biggest crypto exchanges such as Binance, Kraken, and Coinbase resisted the push. They considered the act of blocking Russian users against the decentralized nature of cryptocurrencies and has become a symbol of financial freedom.
“Some ordinary Russians use crypto as a savior now that their currency has collapsed. Many of them may be against what their country is doing, and a ban would also hurt them,” said the CEO of Coinbase.
Reporting from Bitcoin.com News, the Russian ruble fell more than 30 percent this week after a number of countries agreed to impose severe sanctions on Russian entities. On Thursday, Moody's Investors Service downgraded the Russian government's long-term debt rating from investment rating (Baa3) to B3 – a six-tier free fall.
While Russian stock markets remained closed, shares of Russian companies listed on the London Stock Exchange plunged. The London stock exchange has suspended trading of 27 companies linked to Russia, including Russia's biggest bank, Sberbank, whose shares have fallen 99.72 percent since the start of the year.
Regarding the sanctions, the CEO of Coinbase emphasized that every US company must follow the sanctions laws. "If the US government decides to impose a ban, of course we will follow the law," he said.
Armstrong details: “This is why we screen people who sign up for our services against a global watchlist, and block transactions from IP addresses that may belong to sanctioned individuals or entities, just like any other regulated financial services business.”
However, Coinbase believes that Russia is not using cryptocurrencies to evade financial sanctions. He stated that cryptocurrencies were not the right way to evade sanctions.
“We don't think there is a high risk of Russian oligarchs using cryptocurrencies to evade sanctions. Since it is an open ledger, trying to smuggle a lot of money through crypto will be easier to track than using US dollar cash, art, gold or other assets.”
Arstrong's opinion contradicts the statement by the director of cybersecurity of the National Security Council, Carol House, who stated that
“The scale required for the Russian state to successfully evade all US and partner financial sanctions will almost certainly make cryptocurrencies a major ineffective tool for the state,” quoted from Bitcoin.com.
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