The Impact of Ukraine's call to Freeze the Russian Crypto funds

Some of the Crypto exchange platforms started freezing accounts linked to Russia and Belarus, But Where major cryptocurrency exchange Binance said it will not block innocent Russians’ crypto assets. 

As the West persists to inflict more sanctions against Russian banks following Russia’s attack on Ukraine, one Ukrainian officer has called for sanctions on Russians’ cryptocurrency holdings. 

Mykhailo Fedorov, minister of digital transformation of Ukraine, brought to Twitter on Sunday to provoke the global cryptocurrency exchanges to block addresses of Russian users.

 Mykhailo Fedorov emphasized that exchanges should freeze not only the addresses tied to Russia and Belarus officially but also to “vandalize normal users.” He stated: I'm requesting all major crypto exchanges to block the crypto funds of Russian users. 

It's crucial to freeze not just the addresses linked to Russian and Belarusian politicians but even to vandalize ordinary users. Fedorov subsequently pointed out that some crypto-related services initiated to freeze assets from Russia and Belarus, including the nonfungible token platform DMarket.

“Funds frozen from Russian account on cryptocurrency exchange platforms could be contributed to the war measure. Nowadays Robin Hoods. Bravo,” Fedorov stated. He also cited the steady actions carried by the social media giant Meta about Russia’s attack on Ukraine. Fedorov’s recommendations are significantly destructive for the Russian cryptocurrency market. Russians approximately hold $200 billion cryptos in February.

As the Russian ruble has been plunging against the United States dollar and the euro, Russians have been increasingly cashing out their bank holdings and considering crypto investments. BestChange, a major crypto exchange aggregator in Russia, has observed a 20% increase in visits amid Russia’s invasion of Ukraine. 

Disabling Russia could also be catastrophic for major global exchanges such as Binance, as the Russian market is Binance’s second-biggest market behind Turkey in terms of website users.

Binance won’t freeze Russians’ Bitcoin

Binance does not intend to freeze investments by Russians because this would contradict cryptocurrency’s main principles of economic liberty.

Binance stated: “We are not going to unilaterally freeze millions of innocent users’ funds. Crypto is meant to furnish more significant monetary liberation for global people.”

The spokesperson stated that the exchange is taking steps to assure that boycotts are against authorized persons in Russia while “reducing the impact to innocent users.” 

Some crypto leaders consider that boycotts against Russia are ultimately unavoidable. The sanctions will be inevitable by naming new authorized persons as US/OFAC has accomplished in history. Yet, banning all crypto firms from delivering services to normal Russians would not make significance and generate more harm for ordinary people than good.

Kraken CEO Jesse Powell said, that the Kraken exchange will not freeze the funds of the Russian clients without a legal requirement. “Russians should be aware that such a condition could be arriving,” he added. Powell earlier recommended Kraken users move their crypto investments out of the exchanges, guiding to Canada’s Emergency Act freezing the crypto of dissenters. 

I understand the motive for this proposal but, despite my in-depth regard for the Ukrainian people, @krakenfx. The Russian accounts can't be frozen without a legal necessity to do so.


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