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Dominant Crypto Platforms Reluctant to Ban Russian Users

Coinbase and Binance logos
(Image credit: Coinbase / Binance)

This week we have reported on many firms withdrawing their products and services from Russia. However, fintech's problem children – cryptocurrency platforms – are steadfastly refusing to impose blanket bans on Russian users.

Coinbase and Binance, two of the world's biggest cryptocurrency exchanges, today rejected calls to ban all Russian users from trading. Are they being selfish in their resistance to limit Russian traders while other tech titans walk away?

"We believe everyone deserves access to basic financial services unless the law says otherwise," wrote Coinbase CEO Brian Armstrong today. On behalf of Binance, a spokesperson wrote to Reuters to protest, "We are not going to unilaterally freeze millions of innocent users' accounts."

So, in brief, the cryptocurrency exchange giants are staying open in Russia as they reckon they are helping innocent citizens who have nothing to do with the war or the political establishment.

However, a different view is held by European regulators. Those who would like to see Coinbase and Binance act decisively to block Russian traders say cryptocurrency exchanges are helping oligarchs and other sanctioned backers of Putin with money laundering activities. The regulators reason that the crypto avenue lessens the impact of other sanctions. Interestingly, the price of Bitcoin jumped with the onset of war (as did gold), giving it conflict currency credentials.

Shuttering the two major cryptocurrency exchanges isn't likely to have the impact of AMD or Intel closing up shop. Several other exchanges could facilitate the same activities. Thus we could see a whack-a-mole situation if the "big two" were pushed hard enough to deny Russians.

Despite their protestations concerning shuttering their services to the Russian populace, Coinbase and Binance aren't going to break any sanctions. Coinbase, for example, said that if the US government imposes a blanket ban that affects its services, it would follow that directive and fully comply.

The War in Tech News, a Brief Recap

The Russia – Ukraine war has naturally encroached upon technology news as the conflict continues and even seems to be intensifying. We have reported multiple times on the industrial and supply disruptions that are emerging. More recently, the most prominent names of tech have withdrawn products and services from customers in Russia.

Today we reported on Microsoft's withdrawal from the Russian market. Earlier in the week, AMD and Intel halted processor sales in the country, which is heavily impacting consumer pricing. We haven't reported on actions by the likes of Apple, Facebook, Twitter, TSMC, YouTube, or various video gaming companies – but they are all putting Russia blockades in place. Moreover, a week ago, we foretold this trend with a report about new export rules.

Mark Tyson
Mark Tyson

Mark Tyson is a Freelance News Writer at Tom's Hardware US. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.

  • digitalgriffin
    They need to be banned. Quite simply it's a work around to sanctions designed to stop war. As the Russian ruble plummets, it becomes a hedge against inflation in Russia. It also allows Oligarchs to bypass financial restrictions if they can get enough crypto.

    If anything, this will speed the banning of crypto by governments. They loathe what they can't control.
    Reply
  • King_V
    Yeah, I'm gonna go out on a limb and suggest that the sorts of companies whose primary business is in dealing with a "currency" structure that's predominantly good for enabling criminals to more easily get away with their crimes is far more interested in keeping the money flowing than in the welfare of the average Russian citizen on the street.

    The stench of insincerity is strong in their reasoning.

    EDIT: and now, it makes me wonder if Putin and his cronies, along with the Russian oligarchs, have heavily invested in crypto to protect themselves from both sanctions, and the damage they're wreaking on Russia as a whole, in a very "F--- you peons, we've sheltered ourselves from consequences."
    Reply
  • spongiemaster
    digitalgriffin said:
    They need to be banned. Quite simply it's a work around to sanctions designed to stop war. As the Russian ruble plummets, it becomes a hedge against inflation in Russia. It also allows Oligarchs to bypass financial restrictions if they can get enough crypto.

    If anything, this will speed the banning of crypto by governments. They loathe what they can't control.
    I doubt Russia is going to be able to fund their war or stabilize their economy through Bitcoin. Even if they could, they still would need someone else on the other end willing to do business with them.
    Reply
  • InvalidError
    Crypto's full potential at enabling rogue leaders and international terrorism organizations to bypass sanctions due to the very nature of block chains may be about to get exposed for what it is.

    With 140+ countries united against Russia, this is the world's best shot at reaching the same logical conclusion: the only way to enforce economic sanctions against any country on crypto is to ban crypto currencies altogether.
    Reply
  • King_V
    spongiemaster said:
    I doubt Russia is going to be able to fund their war or stabilize their economy through Bitcoin. Even if they could, they still would need someone else on the other end willing to do business with them.
    The highlighted part is the easy part.
    Reply
  • spongiemaster
    King_V said:
    The highlighted part is the easy part.
    Really? What entity has the financial wherewithal to prop up Russia, but would only do it through cryptocurrency?
    Reply
  • InvalidError
    spongiemaster said:
    Really? What entity has the financial wherewithal to prop up Russia, but would only do it through cryptocurrency?
    This is what money laundering and proxies are for. Staples of organized crime.
    Reply
  • spongiemaster
    InvalidError said:
    This is what money laundering and proxies are for. Staples of organized crime.
    Not on this scale. It's already been demonstrated that crypto isn't as anonymous as people like to believe. You can sneak some drug money through, you're not going to fund a war of this scale or nullify the effects of the global sanctions placed on Russia.
    Reply
  • InvalidError
    spongiemaster said:
    Not on this scale. It's already been demonstrated that crypto isn't as anonymous as people like to believe.
    Few things are anonymous when you have the FBI's resources. Normal people cannot afford to investigate the origins of every individual BTC or ETH they get. Give enough people enough Russian crypto through proxies and at some point, you will overwhelm the FBI and other worldwide equivalents' ability to investigate.
    Reply
  • -Fran-
    But why no one thinks of the children Cryptobros!

    Sure... Their poor customers... Yeah, right.

    Regards.
    Reply