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Crypto a ‘Lifeline’ to ‘Ordinary Russians,’ Says Coinbase CEO

2 mins
Updated by Andrew Rossow
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In Brief

  • Coinbase CEO Brian Armstrong says that crypto is serving as a lifeline to ordinary Russian users, in a recent tweet.
  • While acknowledging Coinbase's ongoing desire to comply with sanctions requirements, he also explained the platform's position on banning all Russian users. r explain why his company would not preemptively ban all Russian users from its platform.
  • He said that the platform would not outright ban all Russian users.
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Coinbase CEO Brian Armstrong indicated that the exchange will comply with U.S. requirements if it needs to impose a ban, but believes that crypto still serves as a lifeline to some Russian users.

In a tweet on Friday, Armstrong explained why Coinbase would not preemptively ban all Russian users from its platform:

“We believe everyone deserves access to basic financial services unless the law says otherwise,” Armstrong said. “Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too,” he argued.

He also stated that “some ordinary Russians are using crypto as a lifeline now that their currency has collapsed.” Speaking to the U.S. government any any potential bans it may require exchanges like Coinbase impose, Armstrong said the platform would “of course follow those laws.”

Binance and Kraken will also comply

Coinbase’s view towards U.S. sanctions seems to also align with others, including Binance and Kraken, who have both agreed that while they won’t ban all Russian users, they would still comply with any specific sanctions requirement that could arise.

As it currently stands, Coinbase is currently blocking transactions from IP addresses that could belong to sanctioned individuals or entities.

The U.S. Treasury introduced new regulations that specifically address stifling illicit Russian activity, dubbed ‘Russian Harmful Foreign Activities Sanctions Regulations.’

Biden’s launch of ‘KleptoCapture’ Task Force

In the wake of economic sanctions against Russia in response to its invasion of Ukraine, many have called for crypto exchanges to bar Russian users, including President Joe Biden and Ukraine’s deputy Prime Minister and Minister for Digital Transformation Mykhailo Fedorov.

However, other crypto executives such as Binance CEO Changpeng Zhao, who believe that barring all Russian users would be “unethical”. 

Earlier this week, U.S. president Joe Biden and his administration launched ‘KleptoCapture‘ Task Force with the U.S. Department of Justice (DOJ) – an interagency task force dedicated to enforcing the ongoing sweeping sanctions, export restrictions, and economic countermeasures that the U.S. and its allies have imposed in response to Russia’s unprovoked military invasion of Ukraine.

In addition to investigating and prosecuting violations of sanctions, the task force will also target the use of cryptocurrencies to evade restrictions or launder money. It is Armstrong’s belief that there isn’t a high risk of Russian oligarchs attempting to use cryptocurrency to avoid sanctions:

“…[b]ecause it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets,” Armstrong said.

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Nicholas Pongratz
Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.
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