Ukraine Plans Legal Demands on Crypto Exchanges To Block Russian Accounts
Ukraine has announced legal demands to force crypto exchanges to freeze Russian accounts following Russia’s military operation in the country.
Mykhailo Fedorov, vice prime minister and minister of digital transformation of Ukraine, yesterday tweeted calling crypto exchanges to block the accounts of both Russian and Belarusian users yesterday, which received opposing responses from the crypto community.
I'm asking all major crypto exchanges to block addresses of Russian users.
It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.
The CEO of Kraken Exchange, Jesse Powell, chimed in saying that the exchange “cannot freeze the accounts of our Russian clients without a legal requirement to do so.”
1/6 I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.
In a similar tone, Binance told Reuters that it was “not going to unilaterally freeze millions of innocent users’ accounts.”
Next stop: legal demands
Yulia Parkhomenko, who leads the virtual assets expert group at Ukraine’s Ministry of Digital Transformation said: “We plan to make legal demands. We are preparing letters.”
When asked whether it was right to target Russian citizens, She responded:
“This is a necessary measure. There is no way to identify who is financing the war and who is not.”
Despite Powell saying such a legal requirement is necessary for the exchange to restrict account use, he seemed to be against the move, believing that many Kraken customers were likely anti-war. He also made a point that crypto goes beyond borders and that crypto community should not “have to worry about being caught in broad, indiscriminate wealth confiscation.”
The Kraken CEO has previously made comments that investors should consider taking their crypto off exchanges — including his — if they’re worried about legal enforcement. He earlier said
“If you’re worried about it, don’t keep your funds with any centralized/regulated custodian. We cannot protect you.”
Ukraine asking crypto exchanges to block accounts for Russian citizens comes at an interesting time, as the nation has been adopting crypto for its own benefit, and received more than $17 million in crypto donations so far.
