Coinbase blocks over 25,000 Russian accounts

Crypto exchange Coinbase has blocked more than 25,000 addresses related to Russian individuals or entities it believes to be engaging in illicit activity, Chief Legal Officer Paul Grewal tells in a blog post. He has not specified the number of blocked assets but has said that those accounts have been shared with the US government to further support sanctions enforcement. 

In the past few weeks, governments around the world have imposed a range of sanctions on individuals and territories in response to Russia’s invasion of Ukraine. Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities.

The exchange is taking the following steps to implement the global sanctions program against Russia:

  • It blocks access to sanctioned actors. This involves procedures that include checking potential customers against lists of sanctioned individuals or entities and tracking IP addresses belonging to sanctioned parts of the world, like Crimea and North Korea. 
  • It etects attempts at sanctions evasion. Coinbase said it is regularly updating the global sanctions lists that the exchange use for screening.
  • It anticipates threats. According to the exchange, with the help of advanced blockchain analysis it can identify accounts held by sanctioned individuals outside of Coinbase without any access to their personal information.

Paul Grewal also emphasized that the nature of cryptocurrencies makes them convenient for counteracting sanctions. But Russia will hardly be able to deal with it.

The Russian government and other sanctioned actors would need virtually unobtainable amounts of digital assets to meaningfully counteract current sanctions. The Russian central bank alone holds over $630 billion in largely immobilized reserve assets. That’s larger than the total market capitalization of all but one digital asset, and 5–10x the total daily traded volume of all digital assets. As a result, trying to obscure large transactions using open and transparent crypto technology would be far more difficult than other established methods (e.g., using fiat, art, gold, or other assets).