Jesse Powell, CEO of Kraken, one of the largest cryptocurrency exchanges, announced that he will not prevent Russian users from using the exchange's services, but the fees they pay of up to $10 million will be used for donations to customers. Ukraine.
In the wave of support for Ukraine, different companies and firms stopped offering their services in Russia. Cryptocurrency exchanges were also asked to do the same and prevented Russian users from trading.
However, exchanges do not seem interested in this option, as Coinan and Coinbase are still operating in the country.
These exchanges, as well as Powell's, are still operating in Russia, while Apple, Visa, MasterCard, PayPal, McDonald's and many others are ceasing their activities in Russia.
Instead, Kraken wants to donate $10 million to its customers in Ukraine through a new program. This is the first time the brokerage firm has launched a support campaign of this magnitude.
The assistance program will provide $1,000 worth of Bitcoin to all Ukrainian customers who create an account and have an intermediary or professional account by March 9, starting March 10.
Bitcoin will be freely withdrawable or convertible into another asset, and the exchange will subsidize any costs associated with the transaction. The remaining contributions, totaling up to $10 million, will be distributed in other, unannounced ways over the next few years.
A portion of the donation will come from user fees in Russia.
Kraken has the necessary funds to pay for assistance to Ukrainians, considering it was recently valued at $20 billion and there are rumors of an initial public offering soon this year.
However, at least part of this activity will be financed by the trading volume of Kraken's clients in Russia.
“As part of the campaign, Kraken will also donate an amount equal to the total fees paid by Russian customers in the first half of 2022 to support the assistance package.” , the broker said.
Some were less enthusiastic about the idea, with some arguing that tying the campaign to how much the Russians would pay in brokerage fees could delay the distribution of the money and possibly affect the aid program.
Powell also expressed opposition to freezing the accounts of residents of conflict countries, noting that if they did so, the U.S. would be one of the first countries to freeze their accounts.
“If we were to voluntarily freeze the financial accounts of residents of countries that unfairly attack others or provoke violence around the world, our first step would be to freeze the accounts of all U.S. residents. In practice, that’s not feasible.” Powell said.
Powell's decision is an interesting one that eschews what many see as a hypocritical feature in companies that block Russians from their platforms, but do not block Israeli residents or, as Powell calls them, U.S. residents.
It also helps keep Russian residents, especially those who do not support Putin, trading and even protecting their money from the rampant inflation that is about to affect the country's economy.