Coinbase, an exchange platform for buying, selling, and storing cryptocurrency, announced that it's blocked over 25,000 crypto addresses this week. In a blog post Sunday, Coinbase stated the accounts were related to "Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own proactive investigations," an internal investigation revealed. Coinbase said it shared these addresses with the government for sanctions enforcement.
Lawmakers fear that people and entities hit by severe economic sanctions in response to Russia's invasion of Ukraine could use cryptocurrency platforms to circumvent the sanctions. This growing concern led to legislation currently being drafted to make it even more challenging to use crypto to evade sanctions.
"Cryptocurrency is rearing its ugly head here," Sen. Lindsey Graham told NBC News. "As you sanction the [Russian] central bank, which is a good thing, I worry about how the cryptocurrency could be used by the Russians to stay afloat."
The ban only applies to sanctioned individuals, though there has been a push to ban several crypto exchange platforms from operating in Russia entirely. Various exchanges have pushed back, saying that a full blanket ban on crypto will hurt non-sanctioned Russians from accessing their digital funds as companies like Visa and Mastercard pull support.
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Nigel Green, founder of deVere Group said to International Investments, "While crypto wallets are anonymous, it must be remembered that transactions are on a decentralized ledger which is traceable, permanent, and public." If you're trying to hide illicit money from governments, Green says it's easier to use cash or gold.
How effective would a full ban on crypto be? Changpeng Zhao, the founder of Binance, explains to The Guardian that crypto is "too small for Russia" and that the adoption rate isn't as high as you think. He then says the traceable nature of crypto wouldn't be the best way to hide your money since governments can view the blockchain.
We've seen a growing list of game companies pulling support from Russia to show solidarity for Ukraine. Companies such as CD Projekt have removed their games from Russian digital storefronts, while EA cut the Russian national teams from its FIFA and NHL games. Most major publishers have also stopped selling their games in Russia.
