Ukraine’s vice prime minister has called for crypto exchanges to block Russian accounts amid concerns digital assets are being used to evade sanctions.
Mykhailo Fedorov made the plea on Twitter yesterday as invading Russian forces advanced on Kyiv, the country’s capital city.
“I am asking all major crypto exchanges to block addresses of Russian users,” Fedorov wrote. “It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”
Responding to the message Jesse Powell, the co-founder and CEO of crypto exchange Kraken said: “I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.”
The call to block Russian and Belarusian users from crypto payments infrastructure comes as Russian banks were ejected from the SWIFT payments network, an international messaging system which lets banks make secure cross-border payments. Economic sanctions have today seen the price of the Rouble plummet by 30 per cent against the US dollar prompting fears of a bank run.
However, the former chief of MI6 said crypto threatens to undermine the effectiveness of sanctions and warned that digital assets could face a regulatory crackdown if they are used to evade sanctions amid conflict with Russia.
Crypto is also a boon for Ukranian armed forces and institutions. A decentralized autonomous organisation (DAO) called UkraineDAO has raised over $3m in ETH to support the resistance to Russia’s invasion. The Kyiv Independent has requested financial support in the form of crypto to keep the paper running.