Late last week, the international community imposed broad economic sanctions on the Russian economy and its government following Putin's invasion of Ukraine. This included banning large Russian banks from accessing the SWIFT global payment system.

Nonetheless, some suspect that Russia may wish to use cryptocurrencies as a means of circumventing sanctions. According to a recent report, Ukrainian Deputy Prime Minister and Minister of Digital Transformation Mykhailo Fedorov has asked all cryptocurrency players on Twitter to block the accounts of Russian users.

“I call on all major cryptocurrency exchanges to block the addresses of Russian users. Freeze not only the addresses associated with Russian and Belarusian politicians, but also those of regular users.”

Tip: Top 7 largest cryptocurrencies by market cap

Binance and Kraken reject Ukraine's call to freeze accounts

The Ukrainians are taking several steps to deal with their country's devastating war, and as another form of self-defense, the Ukrainians are trying to launch a financial attack against Russia. Unfortunately, the country does not seem to have the necessary support to effectively implement its plans, as CNBC says that two major cryptocurrency exchanges are not agreeing to Ukraine's request.

At the request of Ukraine, the world's largest cryptocurrency exchange, Coin noted that the company will not freeze the accounts of all Russian users, but will block the accounts of Russian individuals who have been sanctioned.

“We will not unilaterally freeze millions of innocent user accounts.” Krypto is about providing more financial freedom to people around the world. The decision to unilaterally deny people access to their cryptocurrencies runs counter to why cryptocurrencies exist.”

However, while the company says it will not impose sanctions on Russian citizens, it will allocate $10 million to help and respond to the humanitarian crisis in Ukraine through its Coinan Charitable Foundation.

Another top cryptocurrency exchange, Kraken, appears to be on the same page as Coinan. CEO Jesse Powell responded to Fedorov's tweet and also disagreed with Ukraine's request.

“I understand the reasoning behind this request, but while I have deep respect for the people of Ukraine, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.”

However, he warned that Russians should be aware that such a need may be imminent.

A recent Bloomberg report noted that Russians own about 12 percent of total global cryptocurrency holdings. The Russian government estimates that as of December 2021, Russian citizens reportedly own 16.5 trillion rubles (about $174 billion at the time of writing) worth of cryptocurrency.

The Russian market is big business for large cryptocurrencies. According to Cointelegraph, Cointelegraph's cryptocurrency marketplace is the second largest cryptocurrency marketplace after Turkey in terms of website traffic.