The U.S. government is warning crypto exchanges not to facilitate transactions for individuals and entities newly added to its sanctions list.
The Treasury Department published new regulations banning U.S. persons from providing any support to certain Russian oligarchs and entities as part of an ongoing effort to sanction Russia over its invasion of Ukraine, with the rules taking effect on March 1.
“All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in … deceptive or structured transactions or dealings to circumvent any United States sanctions, including through the use of digital currencies or assets or the use of physical assets,” the document said.
The Treasury Department published new regulations on March 1 forbidding US citizens from offering any to some Russian oligarchs and entities in its sanctions against Russia over its invasion of Ukraine, Coindesk reported. On February 25, the US announced technology export controls and bank sanctions against Russia.
The document stated that entire property and interests in property that are in the US or come within the US or within the possession of any US person are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
Exchanges Are Not On Board
Exchanges are not completely on board. While Binance has claimed it will not “unilaterally” freeze the accounts of all Russian users, it has warned it will block the accounts of Russian clients targeted by sanctions.
A spokesperson for the world’s largest crypto exchange told CNBC that crypto is “meant to provide greater financial freedom for people across the globe” and a blanket ban would “fly in the face of the reason why crypto exists”.
Another prominent exchange, Coinbase, has likewise refused to impose a blanket block on all Russian addresses but has stated that it will abide by the restrictions.
Kraken’s CEO, Jesse Powell, tweeted that the company “cannot freeze the accounts of our Russian clients without a legal requirement to do so.”
With inflation expected to rise in Russia, the ruble is likely to lose even more value, forcing Russians to look for other options. In Ukraine, citizens were spotted using bitcoin and the popular stablecoin tether in the face of a falling hryvnia and the suspension of electronic currency transfers.
However, exchanges are not fully on board. While Binance is blocking the accounts of Russian clients targeted by sanctions, it has said it will not “unilaterally” freeze the accounts of all Russian users.
A spokesperson for the world’s largest crypto exchange told CNBC that crypto is “meant to provide greater financial freedom for people across the globe” and a blanket ban would “fly in the face of the reason why crypto exists”.
Coinbase, another major exchange, has also refused to introduce a ban on all Russian addresses but said it will comply with sanctions.
Jesse Powell, CEO of the exchange Kraken, tweeted that the company “cannot freeze the accounts of our Russian clients without a legal requirement to do so.”
Russia has been a strong supporter of cryptocurrency, with the country accounting for around 12% of the global market. This has spurred speculation that crypto may be used to circumvent restrictions.
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