Coinbase, a Nasdaq listed crypto exchange, claims that ordinary Russians use cryptocurrency to save their currency ruble. He also said that he doesn’t see any high-risk scenario in which Russian oligarchs use crypto to escape sanctions.
The Cryptocurrency is a lifeline for ordinary Russians
Coinbase CEO Brian Armstrong shared his view on crypto usage and his exchange’s policy in a series of tweets Friday as Russia continues to wage war against Ukraine.
Firstly, he emphasized that Coinbase is “not preemptively banning all Russians” from using its platform. “We believe everyone deserves access to basic financial services unless the law says otherwise,” he stressed.
Discussions of banning Russians started when the vice-prime minister of Ukraine requested that all major cryptocurrency exchanges block Russian user addresses. He tweeted on Feb. 27, “It’s crucial to freeze not only addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users.”
However, Coinbase, Binance and Kraken were quick to deny the request.
Noting that Coinbase believes “everyone deserves access to basic financial services unless the law says otherwise,” Armstrong said Friday:
Many Russians use cryptocurrency as an emergency fund now that the currency is insolvent. They are likely to oppose the actions of their country, so a ban on crypto would also be detrimental.
After a series of sanctions imposed on Russian entities, the ruble fell more than 30%. On Thursday, Moody’s Investors Service dropped the Russian government’s long-term debt rating from investment grade (Baa3) to junk (B3) — a six-notch free fall.
The Russian stock market is closed. However, the London Stock Exchange has seen a sharp drop in the shares of Russian-listed companies. The London bourse has suspended trading of 27 Russian-linked companies, including Russia’s largest bank, Sberbank, whose stock has fallen 99.72% since the beginning of the year.
Coinbase: Crypto Use to Avoid Sanctions
The Coinbase CEO stressed that all U.S. companies must comply with sanctions laws. “If the U.S. government decides to impose a ban, we will of course follow those laws,” he affirmed.
Armstrong detailed: “This is why we screen people who sign up for our services against global watchlists, and block transactions from IP addresses that might belong to sanctioned individuals or entities, just like any other regulated financial services business.”
The executive however added:
We don’t think there’s a high risk of Russian oligarchs using crypto to avoid sanctions. It is easier to trace crypto than U.S. dollar cash, art or gold because it has an open ledger.
Armstrong stated that it was not uncommon for him to believe that cryptocurrency can be used to bypass Russian sanctions.
Carol House (director of cybersecurity, National Security Council) made a similar comment Wednesday. She stated:
The scale that the Russian state would need to successfully circumvent all U.S. and partners’ financial sanctions would almost certainly render cryptocurrency as an ineffective primary tool for the state.
Let us know what you think of the comments made by Coinbase CEO. Please leave your comments below.
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