Concerns are growing that Russia would utilize cryptocurrency to escape the financial and economic sanctions imposed on it.
To allay these anxieties, Coinbase, the largest crypto exchange in the United States by trading volume, has stated that crypto can be used to promote sanction compliance instead.
Coinbase is abiding by the sanctions, says CLO
Paul Grewal, Coinbase’s chief legal officer, revealed in a blog post published Monday that the exchange is following the directives of governments around the world and implementing a multi-layered, global sanctions program.
Coinbase believes compliance with sanctions to be a vital component of its objective to acquire market trust, according to Grewal. Sanctions are also necessary to strengthen national security, so governments must decide when, where, and how to use them, he noted.
Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities, he wrote.
Coinbase’s sanction compliance policy includes measures to prevent sanctioned actors from accessing the platform and to detect evasion attempts. It accomplishes this by screening new and current users against international sanction lists using Know Your Customer (KYC). Geofencing is also used by Coinbase to block IP addresses from sanctioned countries from accessing the exchange.
Similarly, Grewal stated that the exchange is constantly on the lookout for potential threats. Even if they don’t have accounts on Coinbase, the exchange keeps track of sanctioned entities that may try to evade sanctions by using cryptocurrency.
Crypto, according to the legal adviser, has very little chance of being utilized to escape penalties. This is due to a number of features of cryptocurrencies and blockchain technology.
Crypto transactions are public, traceable, and permanent, to name a few advantages. He believes that public blockchains provide more opportunities to catch bad actors than currency.
The cryptocurrency sector will continue to promote financial independence.
Coinbase isn’t the only exchange that has issued a statement regarding sanctions and the Ukraine crisis. The identical issue has been raised by Binance, KuCoin, FTX, and Kraken. Singapore, for example, has complied with the punishment rules.
Their hesitation to impose a blanket ban on all Russians, however, is a constant element in their pronouncements. The exchanges have stated that doing so would be contrary to the concept of crypto’s existence.
This was also mentioned by Coinbase’s CLO, who stated:
Coinbase helps everyday people to protect, build, and share their wealth through crypto technology.
Brian Armstrong, the CEO of Coinbase, previously expressed this sentiment, saying that only a US directive would cause Coinbase to penalize “ordinary Russians.”
