Coinbase says it has blocked over 25,000 wallet addresses related to Russian individuals or entities that it believes to be engaging in illicit activity.
The blocked addresses represent about 0.2% of Coinbase’s 11.4 million monthly transacting users, based on 2021 data.
In a company blog, Paul Grewal, Coinbase’s chief legal officer, said the largest US crypto exchange has banned access for sanctioned individuals and is using blockchain analytics to identify addresses potentially linked to them, which it also adds to an internal blocklist.
“Today, Coinbase blocks over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own proactive investigations,” Grewal wrote.
“We shared them with the government to further support sanctions enforcement.”
As Russia began its invasion of Ukraine, the Biden administration asked crypto exchanges to help ensure that Russian individuals and organisations aren’t using virtual currencies to avoid sanctions levelled on them by Washington and Allies.
Major crypto exchanges including Coinbase and Binance have said they will comply with government mandates to restrict sanctioned individuals, but won’t ban all Russian users.
Brian Armstrong, Coinbase’s Chief Executive Officer, earlier said some ordinary Russians are using crypto as a “lifeline now that their currency has collapsed.”
US lawmakers have questioned whether cryptocurrency companies are following sanctions against Russia. Four senators, including Elizabeth Warren (D-MA), sent a letter last week urging Treasury Secretary Janet Yellen to outline plans for enforcing compliance.
Crypto companies have hastened to disagree with the analysis, downplaying the digital currency’s value for large-scale illicit transactions.
Changpeng Zhao, Binance founder, called crypto “too small for Russia,” citing its extremely low adoption levels.
“The Russian government and other sanctioned actors would need virtually unobtainable amounts of digital assets to meaningfully counteract current sanctions,” wrote Grewal. (The sanctions so far don’t require blocking ordinary Russian citizens, despite calls from Ukraine to extend them.)
Conversely, they’ve pointed to Ukraine’s extensive crypto fundraising operations, which had raised approximately $54 million as of late last week.
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