US sanctions against Russia cover cryptocurrency exchanges
The US Treasury Department has announced that US sanctions against Russia will include control of cryptocurrencies starting March 1.
US sanctions against Russia include crypto exchanges
Deputy Prime Minister of Ukraine Mykhailo Fedorov recently called on cryptocurrency exchanges to conduct procedures to freeze Russian user accounts. However, this call met with mixed opinions. A negative response came from the CEOs of Kraken, Binance, and Coinbase.
Kraken CEO Jesse Powell responded to Fedorov’s tweet, saying that “it is not possible to close a Russian user’s account without a legal request.
A Binance representative told Reuters that the exchange will not “unilaterally suspend the accounts of millions of innocent users” because “cryptocurrency aims to bring financial freedom to people worldwide.”
Coinbase “will not introduce a blanket ban on all Coinbase transactions with addresses in Russia,” despite a request from a Ukrainian government official.
Now the US Treasury has placed crypto exchanges under sanctions against Russia. The White House has also sanctioned major crypto exchanges.
The US Treasury Department said the latest sanctions against Russia will include controls on digital currencies starting March 1.
In an executive order due to be officially issued later in the day, the government notes that it will crack down on anyone flouting sanctions against Russia, including using cryptocurrencies. As Bloomberg reports, the White House wants major crypto exchanges to ensure they are not used to circumvent Russian sanctions.
The move comes after speculation surfaced that Russia could use crypto assets to circumvent US sanctions. The US and its allies also froze assets abroad last week by removing some Russian banks from the SWIFT messaging and payments network. This has hurt Russia’s economic growth and made it less accessible to foreign currencies that would otherwise have further isolated the country. The new sanctions move was in retaliation for Russia’s invasion of Ukraine. But the sanctions have sparked widespread conflict in and around the Ukrainian capital, Kyiv.
Sanctions on Russia are fueling growth in crypto trading
Cryptocurrency trading volume in Russia has skyrocketed following restrictions, while the ruble has fallen against bitcoin and many other tokens. As domestic inflation has risen, the Russian people have turned to other alternatives. In Ukraine, people have started using bitcoin and stablecoins after hryvnia cryptocurrency remittances dropped.
Russia’s crypto adoption has been pretty solid, accounting for around 12% of the global market. This also fuels speculation that cryptocurrencies are a possible way to avoid sanctions. Ukrainian banks have urged major exchanges to completely block Russian users in this regard. However, the move drew criticism from the community for being politically neutral and contradicting the cryptocurrency’s DeFi nature.
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