Crypto platform blocks thousands of Russia-linked wallets

Cryptocurrency trading platform Coinbase has blocked 25,000 wallet addresses related to Russia.

The platform said the addresses referred to Russian individuals or organizations it believed were involved in illegal activities.

The addresses were blocked over concerns that cryptocurrencies could be used to circumvent sanctions.

Coinbase Chief Legal Officer Paul Grewal made the announcement on a company blog.

He outlined how the crypto exchange is complying with the new rules imposed due to the Russian invasion of Ukraine.

It means no access for sanctioned individuals and includes “sophisticated blockchain analytics” to identify accounts indirectly linked to suspended users.

“Coinbase is blocking over 25,000 addresses related to Russian individuals or entities that we believe are engaged in illegal activities, many of which we have identified through our own proactive investigations,” Mr Grewal wrote.

“We have shared them with the government to further support the enforcement of the sanctions.

“Sanctions play a critical role in promoting national security and deterring unlawful attacks, and Coinbase fully supports these efforts by government agencies.”

The US government had asked crypto platforms to ensure that Russian oligarchs cannot use virtual currencies to avoid sanctions.

But many are resisting pressure from both the Ukrainian government and US and European politicians to go further and ban all Russian users, fearing that ordinary Russians could use the cryptocurrency as a lifeline after the ruble’s value plummeted has fallen to a record low.

Shutting down Coinbase’s operations in Russia would only harm ordinary people, Chief Executive Brian Armstrong said.

“We are not pre-emptively banning all Russians from using Coinbase,” he tweeted.

“We believe everyone deserves access to basic financial services, unless the law says otherwise.”

Russia is becoming increasingly isolated from the larger non-crypto financial systems.

Visa, Mastercard and American Express have all suspended operations in Russia.

All three said foreign-issued cards would no longer work in shops or ATMs in Russia.

But Russia downplayed the impact of the suspension, suggesting that cards issued by Russian banks would continue to work in Russia as transactions could be processed by a domestic operator. And some Russian banks, including Sberbank and Alfa-Bank, said they could co-ID cards linked to international payment systems Mir of Russia and UnionPay of China.