Russia has been invading Ukraine for a week as of March 2. Russia has become increasingly isolated during this time, with President Vladimir Putin going so far as to take a top radio station off the air to limit coverage of the invasion. While Ukraine accepts donations in the form of cryptocurrency, the country wants major crypto exchanges — like Coinbase and Binance — to stop serving the Russian ruble.
Will these crypto exchanges listen or will they retain the notion of an authentically decentralized cryptocurrency market?
Ukraine asks top crypto exchanges to stop supporting the ruble — but will they listen?
The Ukrainian government reportedly reached out to eight major crypto exchanges to get them to halt their support of the ruble. The exchanges include:
Yulia Parkhomenko, the Head of the Department of Development and Financial Monitoring of the Virtual Assets Market, told reporters that Ukraine’s call to halt support of the ruble includes all Russian ruble activity, like ruble spot pairs, fiat gateways, and Russian payment systems.
Ukraine wants to sabotage all Russian cryptocurrency addresses. “We firmly believe that it's crucial to block not only the addresses of crypto wallets linked to Russian and Belarusian politicians, but also to sabotage all Russian customers in order to prevent evading sanctions,” Parkhomenko clarified.
So far, one cryptocurrency exchange — Whitebit — has responded positively, but the others haven't taken action yet. As an industry, cryptocurrency and blockchain technology aim for economic freedom from a decentralized standpoint. Coinbase CEO Brian Armstrong has suggested that a lack of economic freedom can cause war. However, if war is already en route, cryptocurrency’s role and responsibility may shift.
Coinbase, Binance, and Kraken will continue supporting the ruble.
After Ukrainian Vice Prime Minister Fedorov tweeted, “I'm asking all major crypto exchanges to block addresses of Russian users,” major crypto exchanges responded
Coinbase, Binance, and Kraken all publicly declined the call to halt support of the ruble. A Coinbase spokesperson told reporters, “A unilateral and total ban would punish ordinary Russian citizens who are enduring historic currency destabilization as a result of their government's aggression against a democratic neighbor.”
Meanwhile, Kraken CEO Jesse Powell said in a tweet, “The People's Money is an exit strategy for humans, a weapon for peace, not war."
A Binance spokesperson echoed these sentiments and claimed that financial freedom is at the core of crypto’s existence. However, Binance is freezing assets when applicable, based on Russian sanctions that are already in place.
Whitebit has closed trading activities with the ruble and suspended all Russian and Belarus-based registrations.
Will the U.S. add regulations to limit crypto exchange support of the ruble?
The U.S. Treasury's Office of Foreign Assets Control is set to release a draft of the Russian Harmful Foreign Activities Sanctions Regulations on March 2. The draft is poised to include rules on fiat transactions as well as cryptocurrency transactions and will apply to any Russian entity that the U.S. prohibits doing business with.
These regulations could force major crypto exchanges to cease their support of the ruble (or risk being fined or worse).