Ukraine’s Request to Freeze Russian Bitcoin

Some platforms have frozen accounts linked to Russia and Belarus. However, Binance has stated that it will not block the crypto assets of innocent Russians. The West imposed new sanctions on Russian banks in the aftermath of Russia’s invasion of Ukraine; one Ukrainian official has called for sanctions on Russian cryptocurrency holdings.

Ukraine’s Minister of Digital Transformation, Mykhailo Fedorov, took to Twitter on Sunday to urge global cryptocurrency exchanges to block Russian users’ addresses.

Fedorov later pointed out that some industry-related services, including the nonfungible token platform DMarket, have already moved to freeze assets from Russia and Belarus. Russians have been increasingly cashing out their bank holding. They have been considering crypto investments as the Russian ruble has fallen against the US dollar and the euro. As a result, BestChange, a prominent Russian crypto exchange aggregator, has seen a 20% increase in visits since Russia’s invasion of Ukraine.

Leaving Russia could be disastrous for major global exchanges such as Binance. After Turkey, the Russian market is Binance’s second-largest market in terms of website traffic.

Some cryptocurrency executives believe that sanctions against Russia are unavoidable. However, they should only target specific individuals, as the US Office of Foreign Assets Control usually does. Kraken CEO Jesse Powell also stated that without a legal requirement, the Kraken exchange would be unable to freeze the accounts of the exchange’s Russian clients. Powell previously advised Kraken users to withdraw their crypto assets from the exchanges; he cited Canada’s Emergency Act, which freezes the crypto of dissidents.

Binance launched the Ukraine Emergency Relief Fund on Sunday to provide emergency relief through crypto crowdfunding. In addition, the cryptocurrency exchange donated $10 million to aid in the humanitarian crisis in Ukraine.