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
- 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.”
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.
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