The CEO of Coinbase is sceptical that Russian oligarchs would adopt cryptocurrency
According to Coinbase CEO Brian Armstrong, there is little possibility of Russian billionaires utilising cryptocurrency to circumvent sanctions.
Brian Armstrong, CEO of Coinbase, has responded to concerns that the Russian elite may use cryptocurrency to circumvent Western sanctions.
Armstrong said on Twitter early Friday that Coinbase is compelled to adhere to the law and would properly prohibit any transactions originating from IP addresses associated with sanctioned persons. The exchange, on the other hand, would not pre-emptively ban all Russians from its platform unless the US elected to do so later, he added.
“That said, we do not believe that Russian billionaires would use crypto to evade sanctions,” Armstrong said, noting that concealing enormous quantities of money on open and public ledgers is substantially more difficult than using cash, art, gold, or other less traceable assets.
He said that Coinbase was not alone in this view and that Treasury and National Security Council specialists concurred. He referred specifically to a Wednesday webinar in which NSC cybersecurity director Carole House stated that “the scale required for the Russian state to successfully circumvent all US and partner financial sanctions would almost certainly render cryptocurrency ineffective as a primary tool for the state.”
Cryptocurrencies have been at the centre of debates about Russia’s invasion of Ukraine, with many fearful that the nation may use them to circumvent sanctions. Senator Elizabeth Warren—one of the most outspoken crypto opponents in the US government—and three other Democratic legislators asked the Treasury on Wednesday to guarantee that the cryptocurrency business complies with Russia’s sanctions.
“Strong enforcement of sanctions compliance in the cryptocurrency business is vital given that digital assets, which enable organisations to circumvent the conventional banking system, may increasingly be exploited for sanction evasion,” the Senators wrote to Treasury Secretary Janet Yellen.
Ukraine’s Vice Prime Minister Mykhailo Fedorov openly pushed major cryptocurrency exchanges to restrict all Russian customers, arguing that it was “critical” to not only freeze the accounts of politicians but also to “sabotage regular consumers.”
His suggestion for a blanket ban on ordinary Russian nationals, on the other hand, was greeted with strong criticism from the larger crypto community and several of the industry’s top exchanges, including Binance, Kraken, and now Coinbase. Jesse Powell, the CEO of Kraken, was adamant in his answer to Fedorov, stating that the exchange would not freeze the accounts of regular Russian nationals without a legal mandate. He stated:
“Moreover, if we were to voluntarily freeze the bank accounts of inhabitants of nations that attack and incite violence around the globe, the first step would be to freeze all US accounts. That is not a commercially feasible choice for us.”
To that end, it’s important emphasising that the Western partners’ barrage of sanctions on Russia is not broad; rather, it’s focused at certain Russian banks, state-owned enterprises, and select elites. If Coinbase implemented a blanket restriction on regular Russian people, it would go beyond the terms of the sanctions.