Why Ukraine is urging crypto exchanges to ban Russian users

Highlights

• Ukraine's Ministry of Digital Transformation has written letters to eight crypto exchanges such as Coinbase, Binance, Huobi, KuCoin, etc., urging them to stop serving Russian users.
• On their part, the exchanges have expressed their displeasure regarding banning Russian users on their platforms.

The political and military conflict between Russia and Ukraine has rocked the global stock markets and the political world along with the crypto market lately. The Russian economy is facing huge challenges after many Western countries levied a range of sanctions on Russian companies and businessmen. The latest sector in news is the crypto market. Ukraine reportedly received close to US$22 million worth of digital assets in form of different cryptocurrencies, such as Bitcoin, Ether, Tether etc. as donations, following which the stakes have been raised.

While cryptos have often been criticised for allegedly funding financial terrorism, for the first time, they are proving to be an effective tool for investors around the world to move funds to Ukrainian fighters.

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Recently, the Ukrainian government is urging the leading crypto exchanges around the world to ban Russian users. Ukraine's Ministry of Digital Transformation has written letters to eight major crypto exchanges, such as Coinbase, Kraken, Binance, Huobi, KuCoin, etc., asking them to stop serving Russian users on its platform in a bid to isolate them.

US for crypto ban

The United States of America has also joined in urging the crypto exchanges to consider stopping of its services in Russia. President Joe Biden has asked the crypto exchanges to keep a check on digital currency transactions. The Biden administration believes that it is critical to ensure that Russia doesn’t find a way around sanctions that are leveled against them.

These calls have come amid US’s effort to regulate the asset class. It is believed that the White House officials are of the view that cryptos are not a substitute for the US Dollar in Russia, but it’s just a step by authorities to ensure that there is no misuse of digital assets.

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Exchanges’ stand

Leading exchanges have said that it will be unjustified to the Russian users, and they cannot stop its services. Leading crypto exchange Binance said that it has no plans to impose a blanket ban on Russian users on their platform. They added that in case the international community further imposes sanctions, then they will rethink their current stand.

Kraken CEO Jesse Powell said that even though there is a deep respect for the Ukrainian people, the exchange cannot freeze the accounts of Russian clients without any legal requirement.

Similarly, Coinbase and Bitfinex too have suggested for now it will be continuing its services in Russia.

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