UK Financial regulator writes to exchanges in effort to enforce crypto sanctions

Following on from top exchanges refusing to sanction any of their clients in principle, the UK Financial Conduct Authority (FCA) has written to cryptocurrency exchanges based in the UK, reminding them of their responsibilities, and pressuring them to comply with enforcement.

Last week, the world’s biggest exchange Binance, stated that it would not be unilaterally freezing the accounts of its Russian users. Another top exchange Kraken, said through its CEO Jesse Powell, that it would also not be freezing the accounts of Russian users without a legal requirement for doing so.

However, earlier this week, Binance did say that it had blocked all accounts on its exchange that were on the official sanctions list.

The spotlight had come onto cryptocurrency exchanges after Ukraine’s vice prime minister requested that the world’s exchanges block any crypto accounts belonging to Russian citizens or political persons.

In the UK, the financial regulator has written to all home-based exchanges, reminding them of their requirement to enforce sanctions on Russia. 

A spokesperson from the treasury, featured in an article by City A.M. today said:

“As you would expect, we have reached out to each crypto firm registered with us to ensure that they are aware of sanctions and their responsibilities,”

They added:

”We are working with partners to actively monitor these firms. We have made it clear to crypto firms, banks and others that we expect them to focus on their sanction controls and, with our partners, we will be supervising their actions,”

The crypto community has been put into quite a quandary by the Russian sanctions. The ideal of crypto is that it does not distinguish between governments, people, race, gender or anything else. It is completely neutral and open to anyone.

In this vein, Changpeng Zhao, the CEO of Binance, was careful to draw the line between innocent Russian civilians, and those taking part in the invasion of Ukraine. He said recently:

“From an ethical point of view many Russians do not support this war so I think we should separate the politicians to the normal people,”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.