As of press time, Coinbase has blocked 25,000 wallets with addresses linked to Russian individuals as the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued a guideline regarding the sanctions against Russia.
The guidelines include transactions in cryptocurrency to avoid the country from using digital assets to completely evade the international sanctions amidst the Russia vs Ukraine political unrest.
OFAC stated in the guideline that people and businesses in the US that deal with cryptocurrency should be vigilant against attempts to circumnavigate the regulations and should take risk-based steps to ensure they do not engage in such transactions.
In a press release made by Coinbase’s Chief Legal Officer, Paul Grewal, he announced that the 25,000 accounts were blocked in compliance with the new guidelines.
‘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 said.
He also pointed out that the figure isn’t specific to the time period since the invasion of Ukraine. These addresses, according to their data in Coinbase, were identified prior to the siege, noting that the company has not seen a surge in sanction evasion activity during the post-invasion context.
According to the press release, Coinbase said that it is committed to building a safe and responsible financial system that promotes economic freedom around the world but that the institution’s goals are also compliant with economic sanctions.
‘Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities,’ Grewald added.
The crackdown on Russian crypto wallets by Coinbase comes from the concern posed by US lawmakers that digital assets could be used to circumvent the sanctions imposed on Putin’s administration in the country.
On the other hand, US officials of the Biden administration expressed their beliefs that Russia would not be able to use cryptocurrency to completely evade sanctions. This, however, does not mean that companies shouldn’t be on the lookout per the report made by Reuters.
A total ban of Russian transactions is out of the question according to Coinbase’s Chief Executive Brian Armstrong. In a tweet published on March 4, he said that the company is not pre-emptively banning all local users from using the platform.
‘We believe everyone deserves access to basic financial services unless the law says otherwise,’ he posted on his Twitter account.
Other crypto-related platforms like Visa, Mastercard and American Express joined in on the ban on Russia, suspending all their operations in the country.
This imposed crypto and financial ban on Russia does not phase the Putin administration. The country has suggested that cards issued by Russian banks would still be accessible to the general public. Other Russian banks including Sberbank and Alfa-Bank also announced they might issue co-badge cards linked to Mir and UnionPay’s international payment systems.
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