Ukraine’s Request of Freezing Accounts of Russian Users Denied by Crypto Exchanges
The Deputy Prime Minister of Ukraine put in a request to all major crypto exchanges to freeze the accounts of Russian users on their platforms. However, the request has already been denied by some prominent exchanges. According to Kraken, doing so is not a viable business option for them, while Binance stated that it would not unilaterally freeze accounts of millions of innocent users. The tweet from the Vice Prime Minister, MykhailoFedorov had come on Sunday and he asked all prominent crypto exchanges to block the addresses of Russian users. He said that crypto addresses belonging to Belarusian and Russian politicians was important, but ordinary users also had to be sabotaged.
The crypto community has widely criticized his tweet. According to an individual, this request was a violation of the foundation on which crypto itself is based. Another user highlighted that a number of Russian people donate money to Ukraine and have condemned the war. They said that crypto offers them one of the few safe spaces they can operate without worrying about being jailed by their own government. A number of people advised Russian users to get their money out of the exchanges.
Two notable crypto exchanges responded to the request put forth by the Deputy Prime Minister of Ukraine, which are Binance and Kraken. The former said that the purpose of crypto was to provide greater financial freedom to people all over the world. It said that banning people from accessing their crypto unilaterally would completely defeat the purpose of cryptocurrency’s existence. However, the crypto exchange did clarify that it would freeze the accounts of any individual mentioned on the sanctions list. It also noted that steps were being taken to minimize the impact of any move on innocent users.
The chief executive of Kraken, Jesse Powell also responded to the tweets on Sunday evening. The CEO of the exchange said that while he understood the rationale behind the request and he had a lot of respect for the people in Ukraine. But, he said that unless they are legally required to do so, they will not freeze the accounts of their Russian clients. The CEO elaborated that their own government could require them to do so, as it had already happened in Canada, where an account freeze was ordered in response to protests. He added that foreign states, such as the US, could also require it in order to use it as a weapon for turning the Russian population against its government.
Powell had also talked about the request of the Canadian government of freezing the accounts of people on crypto exchanges who were connected to the Freedom Convoy protests recently. He had suggested that anyone who was concerned about their account being frozen could simply switch to using self-custodial wallets for keeping their digital assets. The securities regulator in Canada had red-flagged the CEO’s advice. Powell went on to say that Kraken’s aim was to bring people to a world of crypto in which the lines on the map don’t matter.