Coinbase CEO Brian Armstrong refused to freeze Russian users’ assets during their trade despite requests from officials to help cripple Russia financially.
Coinbase CEO has indicated that the exchange will comply with US requirements if it needs to impose a ban, but believes crypto still serves as a lifeline for some Russian users.
In a tweet posted on Friday, the CEO of Coinbase explained why the exchange would not preemptively ban all Russian users from its platform:
“Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too.”
Speaking about any possible bans by the US government that exchanges like the ones Coinbase imposes might require, Armstrong said the platform would “of course follow those laws.”
Impact of Economic Sanctions on Russia
Like the CEOs of Binance and Kraken, Armstrong cited financial sovereignty and crypto-centric values as reasons to continue protecting Russian accounts.
“We believe that everyone deserves access to basic financial services, unless the law says otherwise.” Armstrong said in a Twitter thread discussing the matter on Friday.
After Russia invaded Ukraine last week, Western nations were quick to crack down on the nation with heavy sanctions. Four of Russia’s largest banks have seen their assets frozen by the US, while US allies have joined forces to isolate Russia from SWIFT.
On Thursday, ratings agencies Fitch and Moody’s downgraded Russian government’s long term debt rating by six notches to “junk” status, saying Western sanctions threw into doubt its ability to service debt and would weaken the economy.
The private sector have also started participating voluntarily. For example, the Glasgow Film Festival has decided to withdraw two Russian productions from screening. Within the cryptocurrency sector, Flexpool, the fifth largest Ethereum mining pool, has decided to stop serving its Russian users.
These sanctions have led to the collapse of the Russian ruble, making it difficult for Russian citizens to protect their savings or purchase basic necessities.
The Russian Ruble have fallen sharply in the past two weeks, reaching 124 to the U.S. dollar on March 4, compared to 81.48 on Feb 23, the day before the invasion of Ukraine.
Now, some members of the crypto community are wondering if these measures are completely ethical or if they are inadvertently harming the wrong people.
Libertarian values of Bitcoin demotivating crypto exchanges to unilaterally freeze all Russian accounts
The libertarian values of Bitcoin is demotivating crypto exchanges to unilaterally freeze all Russian accounts. In fact, the global crypto community also looking on the same page with crypto exchanges.
For example, Ukrainian Deputy Prime Minister Mykhailo Fedorov pressured cryptocurrency exchanges last week to freeze Russian accounts for deliberately “sabotage” ordinary users. The community was mostly hostile to this approach, despite being very supportive of the general Ukrainian cause through various cryptocurrency donations.
Cryptocurrency exchange owners echoed the same sentiment. Rejecting Fedorov’s request, Kraken CEO Jesse Powell explained that Bitcoin is “the embodiment of libertarian values” and that his exchange is focused “on individual needs above those of any government or political faction.”
The next day, a spokesperson for Binance, the world’s largest cryptocurrency exchange, responded similarly. “We will not unilaterally freeze millions of innocent user accounts.”
Armstrong also noted that ordinary Russian citizens, many of whom are opposed to the war, are now using cryptocurrencies as a “lifeline” to protect their wealth and sovereignty. However, he, like Powell, has promised to comply with the law: they will continue to block services belonging to sanctioned individuals and entities.
Former first lady and presidential candidate Hilary Clinton has been disappointed in the response from these cryptocurrency exchanges, mocking their libertarian values. She previously issued warnings about how Bitcoin could undermine the global supremacy of the US dollar.
Read Also: Bitcoin Can Be A Savior For Russia Against US Sanctions
