Ukraine Asks Exchanges to Freeze Russian, Belarusian Crypto Accounts

Binance and Kraken won't freeze accounts for now, while DMarket will.

AccessTimeIconFeb 28, 2022 at 9:52 a.m. UTC
Updated May 11, 2023 at 7:11 p.m. UTC

Mykhailo Fedorov, Ukraine's vice prime minister and minister of digital transformation, has asked "all major crypto exchanges to block addresses of Russian users."

Fedorov tweeted his request, explaining that "it's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users."

Binance, one of the world's leading cryptocurrency exchanges by trading volume, said it has no plan to freeze user accounts in Russia.

"We are not going to unilaterally freeze millions of innocent users' accounts. 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, we are taking the steps necessary to ensure we take action against those that have had sanctions levied against them while minimizing impact to innocent users. Should the international community widen those sanctions further, we will apply those aggressively as well,” a Binance spokesperson told CoinDesk.

The crypto exchange's stance was first reported by Reuters.

DMarket, a Ukrainian-born digital assets company that works as an exchange to trade virtual items from any game on any platform connecting the entertainment industry with the global metaverse, has accepted the request.

The company tweeted to say "Ukrainian-born startup DMarket cuts all relationships with Russia and Belarus due to the invasion of Ukraine. The registration on the platform is prohibited for users from Russia and Belarus; accounts of previously registered users from these areas are frozen."

Vlad Panchenko, CEO and founder of DMarket had previously convinced his board to fly more than 100 of his employees and their families from Kyiv to Montenegro three weeks ago when Russia was threatening an invasion, according to Axios.

In response to the move by DMarket, Fedorov tweeted that "funds from these [frozen] accounts could be donated to the war effort. Nowadays Robin Hoods. Bravo."

However, Jesse Powell, founder of crypto excahnge Kraken, retweeted Fedorov's tweet to announce and explain why his company won't freeze accounts.

But Powell did hint that his stance could change by saying that "Russians should be aware that such a requirement could be imminent."

He added that Kraken FX's mission is "better served by focusing on individual needs above those of any government or political faction" and that "the people's money is an exit strategy for humans, a weapon for peace, not for war."

"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 US accounts. As a practical matter, that's not really a viable business option for us," he said.

UPDATE: (Feb. 28, 10:00 UTC): Updates with new information throughout.

UPDATE: (Feb. 28, 11:50 UTC): Updates with Binance's statement.


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Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

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