Coinbase will not ban cryptocurrency transactions in Russia

 According to Coinbase CEO Brian Armstrong, the company will not restrict all cryptocurrency transactions in Russia since people affected by the Ukraine-Russia conflict are increasingly resorting to these tokens to keep their money accessible.

“We are not pre-emptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise,” Mr Armstrong said on Twitter on Friday.

“Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed.”

Ukraine has asked cryptocurrency exchanges like Coinbase and Binance to put a blanket ban on Russian customers after receiving donations worth $33.8 million in digital money since the start of Russia’s military incursion.

In the midst of the instability produced by the Russia-Ukraine situation, many investors see cryptocurrency as a viable place to store money.The daily amount of Bitcoin trade in roubles and Ukrainian hryvnias has increased by around 270 percent.

After initially falling to about $34,000 following Russia’s advance into Ukraine, Bitcoin has surged about 25 per cent since February 24. It was trading at $41,410 at 10.54pm UAE time on Friday.

“Bitcoin is giving back the early week gains as it becomes clearer by the day that it won’t be a hassle-free safe haven to investors as the western forces are going after the coin to impose strict regulations to prevent Russians from going around the sanctions that are imposed to them,” Ipek Ozkardeskaya, senior analyst at Swissquote, said on Friday.

Meanwhile, Coinbase will keep working to enable cryptocurrency services for the people of Ukraine who are in need of help.

He ruled out the possibility of Russian oligarchs using cryptocurrencies to avoid sanctions.

“Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using US dollars cash, art, gold or other assets,” Mr Armstrong said.

Unlike fiat currencies, which must be moved through various third-party institutions, cryptocurrencies can be transferred from one user to another, dodging government sanctions and other restrictions.

“It would be a mistake to think crypto businesses like Coinbase won’t follow the law. Of course, we will” he said.

Coinbase screens people who sign up for services against global watch lists and as is the case with any other regulated financial services business, blocks transactions from IP addresses that might belong to people or entities under sanctions, Mr Armstrong said.

Russia’s economy has suffered as a result of sanctions imposed by the US and its allies in response to Moscow’s decision to launch a military operation in Ukraine.

The assets of Russian corporations and oligarchs in President Vladimir Putin’s inner circle have been frozen, while European countries have restricted their airspace to Russian private and commercial planes.

The US Treasury has restricted Americans from transacting with the Bank of Russia, the Russian Direct Investment Fund, and the country’s Ministry of Finance, while several Russian banks have been excluded from the Swift global banking network.

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