Crypto platform blocks thousands of Russia-linked wallets

Cryptocurrency trading platform Coinbase has blocked 25,000 Russian-related wallet addresses.

The platform said the addresses were related to Russian individuals or entities it believed had engaged in illicit activity.

The addresses were blocked over fears that the cryptocurrencies could be used to evade sanctions.

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

He described how the crypto exchange was compliant with new rules imposed due to Russia’s invasion of Ukraine.

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

“Coinbase blocks more than 25,000 addresses related to Russian individuals or entities we believe to be involved in illicit activity, many of which we have identified through our own proactive investigations,” Grewal wrote.

“We share them with the government to further support the application of sanctions.

“Sanctions play a vital role in promoting national security and deterring illegal aggression, and Coinbase fully supports these efforts by government authorities.”

The US government had asked crypto platforms to help ensure Russian oligarchs couldn’t 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, amid concerns that ordinary Russians may be using cryptocurrency as a lifeline after the the value of the ruble sank to an all-time low.

Shutting down Coinbase’s operations in Russia would only hurt ordinary citizens, said CEO Brian Armstrong.

“We are not preemptively banning all Russians from using Coinbase,” he tweeted.

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

Russia is increasingly isolating itself from the larger non-crypto financial systems.

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

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

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