According to the vice prime minister, Ukraine has requested that all cryptocurrency exchanges block Russian users’ accounts. But, not all crypto exchanges are agreeing to the request. Binance confirmed it is “not going to unilaterally freeze millions of innocent users’ accounts” while Kraken says it is “not really a viable business option for us.”
Ukraine Needs All Russian Crypto User Accounts Frozen
Mykhailo Fedorov of Ukraine was vice-premier and tweeted Sunday asking cryptocurrency exchanges to stop Russian users’ addresses. “It’s crucial to freeze not only addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users,” he tweeted.
The tweet was widely condemned by the crypto community. One person said the request “Totally violates the foundations and very basis of cryptocurrency.”
Another pointed out: “A lot of people in Russia donate money to Ukraine, condemn the war, and crypto is one of few safe spaces for them to operate and not get jailed by own government.” Many advised, “Get your money out of exchanges,” emphasizing, “not your keys, not your coins.”
Crypto Exchanges Respond to Request to Freeze Russian Users’ Accounts
Two major cryptocurrency exchange platforms have responded to the Ukrainian vice prime minister’s request to freeze accounts of all Russian users at press time.
Binance told CNBC Monday, “We are not going to unilaterally freeze millions of innocent users’ accounts,” adding:
Cryptocurrency is intended to give people more financial freedom around the world. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists.
However, the cryptocurrency exchange clarified that it would block the accounts of any individuals on sanctions lists, noting that it is “taking the steps necessary” to minimize the “impact to innocent users.”
Jesse Powell (CEO of Kraken cryptocurrency exchange) also responded to the vice-prime minister via a series tweets on Sunday night. He said,
Although I can understand your reasoning, Kraken is unable to freeze accounts for Russian clients without a lawful requirement.
The CEO explained: “That requirement could come from your own government, as we have seen in Canada, in response to protests, bank runs, and attempts to flee the country. It could come from foreign states, like the U.S., as a weapon to turn the Russian populace against its government’s policies.”
Recently, Powell spoke up about the Canadian government’s request for crypto exchanges to freeze accounts tied to the Freedom Convoy protest. Anyone who was concerned about having their account frozen should take their coins from exchanges to self-custody. His advice was red-flagged by Canada’s securities regulator.
Powell proceeded to outline Kraken’s mission is to bring individuals into “the world of crypto, where arbitrary lines on maps no longer matter, where they don’t have to worry about being caught in broad, indiscriminate wealth confiscation.”
Kraken CEO:
Focusing on the individual’s needs is more effective than focusing on government and political parties. The People’s Money is an exit strategy for humans, a weapon for peace, not for war.
He concluded: “Besides, if we were going to voluntarily freeze financial accounts of residents of countries unjustly attacking and provoking violence around the world, step 1 would be to freeze all U.S. accounts. As a practical matter, that’s not really a viable business option for us.”
What do you think about the Ukrainian vice prime minister’s request for crypto exchanges to freeze accounts of all Russian users? Comment below.
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