Dapper Labs NFT Wallet Restricts Russian Users After EU Sanctions

Dapper Labs, the Web3 startup behind NBA Top Shot, has imposed a near-complete ban on Russian users in a bid to stay inline with fresh sanctions on the country.

“It is now prohibited to provide cryptoasset wallet, account, or custody services of any value to accounts with connections to Russia, irrespective of the amount of the wallet,” Dapper Labs said in a statement last week.

The Vancouver-based blockchain company said the move was a result of a directive from its payment processing partner, which is subject to European Union regulations. 

On Oct. 6, the EU confirmed a sweeping ban on providing crypto services to Russia as part of its eighth round of sanctions against the country for its aggression in Ukraine. 

The Dapper wallet is a custodial wallet for digital assets on Dapper Labs’ Flow blockchain, originally launched in 2020 as a gaming-focused network but now underpins a raft of NFT-centric projects.

The wallet supports NFT offerings NBA Top Shot, Allday, UFC Strike, CryptoKittes, which implies they will all be affected by the ban. 

Under new measures, the bloc tightened a previous rule that restricted crypto payments to and from Russian accounts up to 10,000 euros ($9,727). The threshold has now been removed, banning all cryptoasset wallets, accounts or custody services.

Dapper Labs NFTs still ‘belong’ to Russians — they just can’t move them

Despite Dapper Labs stating it could no longer offer custody services to Russia-based users, the firm says those affected can still view and access their NFTs via its wallet, as it has only suspended accounts — not deleted them.

Dapper Labs says this means any NFT previously purchased by an affected Russian user still belongs to them.

Blockworks has reached out to Dapper Labs to confirm whether the Flow blockchain itself would actively censor Russia-based users and will update this piece as we hear back.

“Any Moments you own and any Dapper Balance continue to be your property,” the company said in its blog post, referring to the blockchain-based collections that users hold.

But they can’t buy, sell or gift any NFTs, even by using their existing account balances.

The EU believes its crypto clampdown is warranted as the previous 10,000 EUR cap wasn’t effective. Its sanctions are “imposing a direct cost on Russia for its war of aggression and damaging Russia’s industrial and economic ability to wage war, manufacture more weapons, and repair existing weapons systems.”

Although Western powers have adopted several rounds of sanctions since Russia invaded Ukraine in February 2022, Moscow has not indicated a possible diplomatic solution.

On Monday, massive explosions shook Ukraine’s capital Kyiv and other cities in apparent revenge attacks.

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