One of the largest cryptocurrency exchanges, Coinbase, just blocked over 25,000 Russian crypto wallet addresses that they think are linked to Russian individuals or enterprises engaging in criminal activities.
In response to Russian military action in Ukraine, Western allies and other partners across the globe have begun to impose an unprecedented package of coordinated sanctions against Russia. Alongside the contemporary industries, the crypto industry is also actively playing its part in adhering to global calls and imposing crypto related services ban to Russia.
Coinbase Complies With Calls For Sanctions Against Russia
According to an official blog post, Coinbase, has now blocked over 25,000 crypto wallets belonging to Russian individuals and entities. The U.S based crypto exchange has implemented a multi-layered, global sanctions program to support government authorities in deterring unlawful aggression and promoting national security.
As per the blog post, Coinbase uses geofencing controls to prevent access to the Coinbase website, alongside the platform’s products and services, by anyone using an IP address in a sanctioned geography (e.g., Crimea, North Korea, Syria, and Iran). The blocked addresses have already been shared with the US government to “further support sanctions enforcement.”
Coinbase’s Chief Legal Officer Paul Grewal said that Coinbase’s primary goal is to promote security, safety, and transparency that promotes economic freedom around the world. The platform tries its best to ensure the integrity of all transactions and a critical part of that goal is the company’s compliance with economic sanctions. He went on to add,
“We welcome public scrutiny of the crypto industry, and will continue working to enhance our overall compliance program and industry compliance standards. This is an integral part of our ongoing commitment to remaining the trusted platform that we, our customers, and the public expect.”
Benefits Of Cryptocurrency In Enforcing Sanctions
The post explained in detail, the benefits of digital assets for sanctions enforcement extend beyond these initiatives. Comparing to fiat currency, digital asset transactions are traceable, permanent, and public. As a result, digital assets can actually enhance the ability to detect and deter evasion compared to the traditional financial system.
Ordinary fiat currency laundered through traditional financial institutions remains one of the most common mechanisms for sanctions evasion and money laundering. As the United States Treasury noted of sanctions against Iran, the “Iranian regime has long used front and shell companies to exploit financial systems around the world” to evade sanctions. Grewal remarked,
“Trying to obscure large transactions using open and transparent crypto technology would be far more difficult than other established methods (e.g., using fiat, art, gold, or other assets).”
