Crypto exchanges refuse to freeze all Russian accounts as Ukraine requested

Major crypto exchanges including Coinbase and Binance are refusing a request by Ukraine to freeze all Russian accounts, saying that doing so would harm civilians and be counter to their ideals. “To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists,” a Binance spokesperson told CNBC. 

In a tweet, Ukraine’s Vice Prime Minister Mykhailo Federov asked major crypto exchanges to freeze all Russian and Belarus accounts, not just the accounts of sanctioned oligarchs. “It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users,” he said. 

Such a move would be in line with US and European Union sanctions against Russian banks and leadership designed to cripple the nation’s economy. However, freezing crypto holdings could directly impact regular Russian citizens.

Coinbase said it’s already sanctioning any persons or entities in Russia as required by law, but won’t go any further. “A unilateral and total ban would punish ordinary Russian citizens who are enduring historic currency destabilization as a result of their government’s aggression against a democratic neighbor,” it told Motherboard. Binance similarly stated that it wouldn’t “unilaterally freeze millions of innocent users’ accounts.” 

Binance, on the flip side, said it has committed to donate at least $10 million in humanitarian aide to Ukraine and launched a fundraiser with the goal of raising $20 million. The company is also currently under investigation by the US government for alleged money laundering and insider trading.

Other exchanges including KuCoin also said they wouldn’t go beyond anything required by law. Kraken exchange CEO Jesse Powell said that such a move would violate the company’s “libertarian values.” 

One exception is Dmarket, a Ukraine-based platform that allows people to trade NFTs and virtual in-game items. The company said in a tweet that it had cut “all relationships with Russia and Belarus due to the invasion of Ukraine.”