Whose side is he on? cryptocurrency of? If you had asked Satoshi Nakamoto, the pseudonymous person (or persons) who created the Bitcoin platform in 2008, he/she would probably have dismissed the question. The whole point of cryptocurrencies like Bitcoin was neutrality—the fact that no government, bank, or organization could stop you from using them, whether you were paying for a pizza, a banned book, or a bag of cocaine.
That, of course, began to change soon after the cryptocurrency’s value made it the perfect medium for criminal transactions, from ransomware to dark web markets. Regulators around the world require exchanges and other “off-ramps” to blacklist cryptocurrency from accounts linked to criminal activities or individuals, even though illegal transactions accounted for just 0.15 percent of global crypto movements in 2021.
But Russia’s invasion of Ukraine is another matter. The nature of crypto as money without borders and the abundance of young, passionate people sitting on piles of crypto-millions have made it a preferred method for Ukraine to raise funds from people outraged by Moscow’s actions. At the same time, there were concerns that government officials and Russian President Vladimir Putin’s wealthy inner circle could circumvent Western sanctions by moving their assets into crypto.
Cryptocurrency exchanges are reportedly blocking all transactions from accounts known to be associated with sanctioned individuals.
Crypto exchange Coinbase on Monday blocked more than 25,000 Russia-linked addresses it believed were linked to illegal activity in order to comply with sanctions against Russia. WIRED understands that Binance, the world’s largest crypto exchange, has already identified and blocked at least one wallet linked to a sanctioned person, and has taken a proactive approach, investigating and blocking accounts of people known to be close to persons subject to sanctions. Exchanges in most Western countries are required to carry out know-your-customer and anti-money-laundering checks, although some, including Binance, have been criticized for alleged laxity.
Still, Tigran Gambarian, Binance’s vice president of global intelligence and investigations, believes fears that crypto will help support Russia are overblown. “Crypto is not a very effective way for a government and for a nation state to avoid sanctions,” he says. “There are other ways to transfer billions of dollars using the already existing financial system instead of using cryptocurrency.”
