Ukraine's vice PM calling to freeze Russian users' accounts on crypto exchanges
As few platforms freeze accounts linked to Russia and Belarus, Binance said it will not block innocent Russians' crypto assets.
As the West continues to impose more sanctions against Russian banks following Russia's invasion of Ukraine, Ukrainian official has called for sanctions on Russians' cryptocurrency holding as well.
Mykhailo Fedorov, Ukraine's Minister of Digital Transformation, took to Twitter on Sunday to urge the global cryptocurrency exchange to block the address of Russian users.
He emphasized that exchanges should freeze not only the addresses tied to Russia and Belarus officially but also to "sabotage ordinary users."
I'm asking all major crypto exchanges to block addresses of Russian users.— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022
It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.
Fedorov subsequently pointed out that some industry-related services have already moved to freeze assets from Russia and Belarus including NFT platform DMarket.
“Funds from these accounts could be donated to the war effort. Nowadays Robin Hoods. Bravo,” Fedorov annouced. He also cited the ongoing measures taken by the social media giant Meta regarding Russia's attack on Ukraine.
Ukrainian-born startup DMarket cuts all relationships with Russia and Belarus due to the invasion of Ukraine.— DMarket (@dmarket) February 27, 2022
- The registration on the platform is prohibited for users from Russia and Belarus;
- Accounts of previously registered users from these areas are frozen;
Fedorov's appeals could potentially be catastrophic for the Russian cryptocurrency market, as Russians were estimated to hold more than $200 billion in crypto as of early Feb.
As the Russian ruble has been plummeting against the U.S dollar and the euro, Russians have been increasingly cashing out their bank holding and considering crypto investments. Crypto exchange in Russia, has observed a 20% increase in visits following Russia's invasion of Ukraine.
Binance does not plan to freeze assets by Russians because this would contradict cryptocurrency's main principles of financial freedom, the firm told on Monday:
"We are not going to unilaterally freeze millions of innocent users’ accounts. Crypto is meant to provide greater financial freedom for people across the globe."
Kraken CEO Jesse Powell said that Kraken exchange will not be able to freeze the accounts of the exchange's Russian users without a legal requirement. "Russians should be aware that like a requirement could be imminent," Powell previously recommended Kraken users to move their crypto assets out of the exchanges, referring to Canada's Emergency Act freezing the crypto of dissidents.
1/6 I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.— Jesse Powell (@jespow) February 28, 2022
Russians should be aware that such a requirement could be imminent. #NYKNYC https://t.co/bMRrJzgF8N
The act had pushed crypto companies to freeze Bitcoin (BTC) wallets related to local anti-vaccine protests in mid-Feb.
Other crypto exchanges opt to freeze Russia's crypto assets, many crypto companies have been actively working to support Ukrainian refugees and the army
On Sunday, Binance launched the Ukraine Emergency Relief Fund to provide emergency relief through crypto crowdfunding. The crypto exchange Binance commits $10 Million to Ukraine
#Binance is donating $10 million to help the humanitarian crisis in Ukraine— Binance (@binance) February 27, 2022
Our focus is providing on-the-ground support through charity & collaboration.@BinanceBCF also launched the Ukraine Emergency Relief Fund to provide emergency relief through crypto crowdfunding.
CoinGate has introduced a similar initiative as well, opening a special fundraising account to support the Ukrainian Defence. The fundraising effort planning to allow users to donate in more than 70 cryptocurrencies, with the funds going directly to the National Bank of Ukraine.
Ukrainian Kuna exchange last Thursday launched a crypto fund to help charities aiding the army and the state in their resistance against the Russian invasion.
Ukraine has raised over $23 million worth in crypto since the launch of different donation campaigns.
Russia's Prosecutor General's Office warned Russians that any help to a foreign country during the period of the "special operation to save the DPR and LPR" will be regarded as treason to the Motherland, an offense that carries a prison term of up to 20 years.