Coinbase Blocks 25,000 Accounts Linked to Russia To ‘Support’ Sanctions

Coinbase said it blocked tens of thousands of accounts linked to Russian individuals and entities suspected of “illicit” activity

article-image

Source: Nasdaq

share

key takeaways

  • Coinbase said it has blocked the accounts and has shared the blocked addresses with the US government
  • The exchange said it is working with authorities to monitor sanctions lists and screen individuals demonstrating “high-risk” behavior

Coinbase has blocked 25,000 wallets addresses linked to what the cryptocurrency exchange believes are Russian individuals and entities engaged in illegal activity.

According to a blog post on Monday, Coinbase’s Chief Legal Officer Paul Grewal said many of the accounts had been identified through the exchange’s own “proactive” investigations.

The move is part of a wider response to the invasion of Ukraine by Russia, the exchange said. The addresses have been shared with the US government to “further support sanctions enforcement.”

“Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities,” the post said.

The move comes days after Coinbase CEO Brian Armstrong said in a tweet last Wednesday his company didn’t think there is a “high risk” of Russian oligarchs using crypto to avoid sanctions.

“Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using US dollars cash, art, gold, or other assets,” Armstrong said.

Exchanges in the US and abroad have agreed to follow sanctions orders but have refused to blanket-ban Russians on the basis of their nationality as a response to the ongoing Ukrainian-Russian conflict.

The Russian military moved into Ukrainian territory Feb. 24 under the orders of President Vladimir Putin after weeks of encirclement and warning from US intelligence. The conflict has sparked a humanitarian crisis and drawn condemnation from Western powers — including sweeping sanctions designed to cripple Russia’s economy.

Under that guidance, Coinbase said it is proactively blocking access to sanctioned actors during the onboarding of new user signups by checking accounts against a list of sanctioned individuals and entities. The exchange also said it is detecting attempts to evade sanctions through an updated list it uses for screening.

Crypto is transparent by nature

Coinbase said that crypto naturally deterred common approaches to sanctions evasion and pointed to fiat currency, laundered through traditional financial institutions, as the most common way to get around them.

It also pointed to countries like Iran using shell companies to exploit the financial system and evade sanctions.

“An entire money laundering industry has emerged to hide assets in ordinary fiat currency using these techniques,” the exchange said.

By contrast, crypto and digital asset transactions are “traceable, permanent and public” and “enhance” Coinbase’s ability to “detect and deter” evasion when compared to the traditional financial system, it said.

Coinbase has come under fire in the past, particularly from the digital rights group Electronic Frontier Foundation in 2020 over how the exchange manages requests by law enforcement for users’ private financial data.

“We believe we can balance these interests by continuing to support law enforcement efforts while promoting policy frameworks that respect individual privacy,” Coinbase said.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

And could BitGo’s offering dump the entire stablecoin market on its head?

article-image

Institutions to test out the settlement of “digital assets and currencies” on a network that annually carries more than 5 billion financial messages

article-image

After Bitwise’s XRP ETF filing this week, one industry watcher notes: “Politics will determine whether this happens soon or in a few years”

article-image

Plus, a look back at some of the SEC’s biggest enforcement moves under Gurbir Grewal

article-image

The forward-looking financial system is being championed by several contributors to India’s UPI digital money system

article-image

Multiple teams are pursuing integration cross-chain and off-chain