The vice prime minister of Ukraine has asked all major cryptocurrency exchanges to freeze accounts of all Russian users. However, some crypto exchanges have already denied 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 wants accounts of all Russian crypto users frozen
Mykhailo Fedorov, Ukrainian Deputy Prime Minister, tweeted Sunday asking all major cryptocurrency exchanges to block Russian user addresses. “It is crucial to not only freeze addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users,” he tweeted.
His tweet has been widely criticized in 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 are giving money to Ukraine, condemning the war, and crypto is one of the few safe spaces for them to operate and not be imprisoned by their own government.” Many have 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 on Monday, “We are not going to unilaterally freeze the accounts of millions of innocent users,” adding:
Crypto is meant to provide greater financial freedom for people across the globe. 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 anyone on the sanctions lists, noting that it was “taking necessary steps” to minimize the “impact on innocent users”.
Jesse Powell, the CEO of cryptocurrency exchange Kraken, also replied to the vice prime minister in a series of tweets Sunday evening. He wrote:
I understand the reason for this request but, despite my deep respect for the Ukrainian people, Kraken cannot freeze the accounts of our Russian customers without a legal obligation to do so.
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 about the Canadian government’s request for crypto exchanges to freeze accounts linked to the Freedom Convoy protest. He advised anyone worried about their accounts being frozen to withdraw their coins from exchanges and keep them themselves instead. His opinion was 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’s CEO said:
Our mission is best served by focusing on individual needs rather than those of any government or political faction. People’s money is an exit strategy for humans, a weapon for peace, not 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.”
