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Coinbase CEO, Brian Armstrong, has said the exchange will comply with a ban on Russian users should the U.S. government impose rules to that effect.
“If the U.S. government decides to impose a ban, we will of course follow those laws,” Armstrong said in a tweet.
Armstrong also took the opportunity to double down on the exchange’s existing stance when it comes to banning Russian users from the exchange amid the invasion of Ukraine.
“We are not preemptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise,” Armstrong also said.
He added that “some ordinary Russians are using crypto as a lifeline now that their currency has collapsed.”
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Coinbase’s view is largely in line with other exchanges like Binance and Kraken, which have said they will not preemptively ban all Russian users, while also claiming they will comply with any specific sanctions requirements which arise.
Other exchanges have taken a different view.
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Whitebit exchange told Decrypt via email that it has already, preemptively, taken steps against Russian users.
“Procedures for checking for sanctions lists have been introduced, trading activities with RUB [Russian ruble] have been closed, and registration of users from the countries of the Russian Federation and the Republic of Belarus have been suspended,” Whitebit said.
Since Russia’s invasion of Ukraine on February 24, 2022, sanctions levied against the Russian state and Russian interests have been widespread.
To date, these include a wave of sanctions against Russian banks (including its central bank) and state-owned enterprises, targeted sanctions against key Russian individuals, export controls, and trade and investment restrictions in the Luhansk and Donetsk regions.
A select group of Russian banks has also been banned from the international payments system, Swift.
When it comes to crypto, the situation remains fluid.
Earlier this week, France’s Finance Minister Bruno le Maire said the European Union is “taking measures” to ensure Russia does not pivot to crypto in order to evade sanctions.
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What’s more, the United States Treasury recently introduced new regulations that built on an existing executive order designed to stifle illicit Russian activity. The executive order, titled “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation,” was issued in April 2021.
The new regulations, titled the “Russian Harmful Foreign Activities Sanctions Regulations,” came into force on March 1, 2022, and can be found on the Federal Register here.
As they pertain to crypto, these new rules take aim at “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.”
In his most recent Twitter thread, Armstrong said Coinbase screens people who sign up for their services “against global watchlists.”
He added the exchange “blocks transactions from IP addresses that might belong to sanctioned individuals or entities.”
Decrypt asked Coinbase for information about its compliance procedures in the wake of the newly enforced Russian Harmful Foreign Activities Sanctions Regulations.
A Coinbase spokesperson told Decrypt via email the exchange is taking a number of actions to ensure compliance with latest sanctions.
These actions include sanctions screening during a customer’s onboarding process, utilizing technical systems to prevent transactions to or from OFAC-designated sources, as well as working with industry threat intelligence companies to monitor emerging risks.
The spokesperson added Coinbase remains vigilant to ensure the exchange is meeting its obligations in the context of Russia’s invasion of Ukraine.
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