Coinbase (COIN)is blocking 25,000 Russian-linked crypto addresses it believes are tied to illicit activity, Chief Legal Officer Paul Grewal said in a late Sunday blog post.
That figure accounts for years of sanctions and compliance efforts against Russian bad actors. In other words, it is not specific to the war in Ukraine. Coinbase said it has not seen a surge in illicit activity following Russia’s invasion of Ukraine, Grewal said.
Exchanges have been under pressure to closely monitor Russian-linked crypto activity in the days following Russia’s attack on Ukraine. Much of that is due to crypto’s purported risk as a tool for sanctions evasion. Coinbase and other industry participants say those fears are overblown.
“Digital assets have properties that naturally deter common approaches to sanctions evasion,” Grewal wrote in the blog post. He later claimed those properties “can actually enhance our ability to detect and deter evasion compared to the traditional financial system.”
Coinbase cast the 25,000 blocks as evidence of its “proactive” work in rooting out bad actors. It said it can anticipate threats, block sanctioned individuals from engaging with the company and detect attempts at evasion.
It's unclear if any of those addresses are controlled by Coinbase or are instead external wallets that it has blacklisted. Coinbase has a very limited business footprint inside Russia, offering only non-custodial services.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.