Crypto News

Coinbase Blocks 25,000 Crypto Wallets Tied to Illicit Activity, But Remains Open to Russian Users

Coinbase Blocks 25,000 Crypto Wallets Tied to Illicit Activity, But Remains Open to Russian Users
© Copyright Image: DailyCoin.com

The largest U.S. cryptocurrency trading platform Coinbase, announced the blocking of more than 25,000 crypto wallet addresses related to Russian individuals or entities suspected to have engaged in illicit activity. The blocked addresses make up approximately 0.2% of Coinbase’s 11.4 million monthly transacting users. Instead of targeting all Russian-based users, the platform has chosen to implement selective safety measures.

Exchanges Push Back Against Bans

Following the start of the war in Ukraine, and the resulting financial sanctions placed upon Russia, the ruble hit an all-time low. As such, crypto trading volumes have already seen a spike as Russian citizens moved their money into cryptocurrencies to protect it against the plummeting value of the ruble and the impact of Western financial sanctions.

Crypto exchanges are coming under pressure to block all transactions with and from Russia, as fears arise that cryptocurrencies may provide the perfect back door for Russia to continue its financial transactions despite measures to cut it off.

Mykhailo Fedorov, Ukraine’s vice-prime minister, called on “all major crypto exchanges to block addresses of Russian users,” claiming that it is “crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”

So far largest crypto exchanges have been careful in their handling of any bans, as to do so would be contradictory to the decentralized nature of crypto, and thereby spark controversy. Brian Armstrong, CEO of Coinbase, wrote on his Twitter: “we are not preemptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise.”

A spokesperson for Binance, the world’s biggest cryptocurrency exchange, told CNBC that unilaterally freezing the accounts of Russian users would “fly in the face of the reason why crypto exists.”

Selective measures

Paul Grewal, Coinbase’s chief legal officer, wrote on the company’s blog that the crypto exchange has banned the access of sanctioned individuals, and is actively using blockchain analytics to identify addresses potentially linked to them, before adding them to an internal blocklist.

“Today, 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 wrote. “We shared them with the government to further support sanctions enforcement.”

Coinbase has made clear its intentions to to stand with the governments to support the necessary sanctions. To be committed to building a safe and responsible financial system that promotes economic freedom worldwide, the company declared that they would be implementing selective measures.

Coinbase further revealed that it would be checking account applications during the onboarding process against lists of sanctioned individuals and entities in order to block sanctioned actors. On-going screening is expected to detect any attempts at evasion, while a sophisticated blockchain analytics program will identify high-risk behavior, said the officer.

Could Crypto Enhance Sanction Compliance Efforts?

Grewal opines that using cryptocurrencies could contribute to the sanctions rather than act as a trojan horse. In contrast to fiat money, which is easily laundered, digital asset transactions are traceable, permanent, and public, thereby making evasion attempts easier to detect.

“Public blockchains offer unprecedented visibility into the details of transactions, including information about the date and time of each transaction, the type of virtual asset transacted, the amount, the wallet addresses involved, and the unique transaction identifier,” wrote Grewal.

Furthermore, any suspicious transaction can easily be traced, as a transaction, once recorded on the blockchain, remains there permanently: “In many cases, law enforcement can trace the transaction history of a wallet from the very first transaction, follow transactions in real-time, and group transactions according to risk level based on interactions with other wallets,” advocated Grewal.

EMAIL NEWSLETTER

Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7]

You can always unsubscribe with just 1 click.

Read more: https://dailycoin.com/coinbase-blocks-25000-crypto-wallets-tied-to-illicit-activity-but-stays-open-to-russian-users/

Text source: DailyCoin.com

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
Buy & sell Crypto in minutes

Join BINANCE!

The world's largest crypto exchange

You're just steps away from receiving your reward.

The most complete Crypto News Center.

Search Stories:

Latest top stories