Ukraine has asked cryptocurrency exchanges to block all addresses associated with users in Russia and Belarus, fearing the country will use cryptocurrencies to circumvent economic sanctions.
We know that the US and its allies prevent Russian banks from using the SWIFT transaction system – which is used for transactions between banks around the world – and that most offshore banks in Moscow are also restricted.
Ukraine's Deputy Prime Minister and Minister of Digital Transformation called on the cryptocurrency side to prevent Russians from resorting to cryptocurrencies.
Here's Mykhailo Fedorov's tweet: "I ask all major cryptocurrency exchanges to block Russian users' addresses. Freeze not only addresses associated with Russian and Belarusian politicians, but also addresses that undermine ordinary users."
Russia and Cryptocurrencies
The minister's concerns are well-founded, as Russia holds 12% of the total market value of cryptocurrencies. Putin also recently defended Bitcoin.
The Central Bank of Russia has issued a report supporting a ban on cryptocurrencies in the country, claiming that cryptocurrencies would "pose a huge risk to financial stability, through which banks and other market participants could infect the entire financial system.
Putin has opposed and actively expressed regulation of cryptocurrency and mining in the country.
As for the requested restrictions, the DMarket platform related to the trading of virtual goods and virtual world technologies has been shaken for freezing the assets of Russia and Belarus.
"As a result of the invasion of Ukraine, the Ukrainian startup DMarket cut off all relations with Russia and Belarus.
– Prohibit users from Russia and Belarus from registering on the platform.
– The accounts of previously registered users in these regions are frozen;"
Cryptocurrency and Kraken Refuse to Block User Accounts
The world's largest exchange Cryptocurrency is not in favor of paralyzing the accounts of Russian users because it would prevent those who are innocent in the war from trading and using the platform. The company said that one of Coinan's values is financial freedom.
Kraken CEO Jesse Powell said he is ready to comply with Mykhailo Fedorov's demands if he has to, and the Russians know that could happen at any time.
However, he has decided not to freeze the broker's Russian client accounts initially, and he will need to be legally required to comply with the order.
It is worth mentioning that cryptocurrencies were and are extremely important for Ukraine throughout the war. The country received millions of dollars in donated cryptocurrencies to support itself against Russia and be a great ally.