Coinbase has joined the list of cryptocurrency exchanges that do not plan to block Russia-based users from accessing their services. The company’s CEO believes that oligarchs won’t be able to use digital assets, while many ordinary Russians could buy crypto while their national currency tumbles.
Coinbase Won’t Ban Russia-based Clients
With Russia’s President launching a “special military operation” against Ukraine, which turned out to be simply a war, the Western powers – including the US and the EU – decided not to get involved directly. Instead, they began sending military equipment and funding and started to embrace the millions of refugees.
As far as Russia is concerned, most countries imposed severe sanctions, the majority of which were financial. Amid these were Russian banks getting cut off SWIFT. Some people even started requesting cryptocurrency exchanges to follow suit and ban Russian-based customers from accessing their platforms. They argued that oligarchs could employ the asset class to bypass the financial sanctions.
While some South Korean companies reportedly decided to comply, others, such as Binance and Kraken, refused, indicating that such a move would be against the core values of the crypto industry.
Coinbase CEO, Brian Armstrong, joined the second club. He believes the risk of Russian oligarchs utilizing crypto to avoid sanctions is rather small. This is because digital assets use blockchain where every transaction is recorded and visible, meaning that “trying to sneak lots of money through crypto would be more traceable than using US dollars cash, art, gold, or other assets.”
Yet, Armstrong vowed to block transactions from IP addresses that might “belong to sanctioned individuals or entities, just like any other regulated financial services business.”
5/ That being said, we don’t think there’s a high risk of Russian oligarchs using crypto to avoid sanctions. Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) March 4, 2022
Ordinary Russians Can Benefit
While joining Ripple CEO Brad Garlinghouse in refuting the idea that oligarchs can indeed use crypto to bypass sanctions, Armstrong noted that ordinary citizens can view the asset class “as a lifeline now that their currency has collapsed.”
Indeed, the Russian ruble lost about 30% of its value against other fiat currencies in days after the war began. Shortly after, reports emerged indicating that the bitcoin and crypto trading volumes from Russia (and Ukraine) had soared to new highs.
However, Armstrong warned that Coinbase’s stance could change in the future, saying, “if the US government decides to impose a ban, we will, of course, follow those laws.”
Written by: Jordan Lyanchev