Concerns keep pouring in that Russia may use crypto to evade the barrage of financial and economic sanctions that have been placed on it. To allay these fears, Coinbase – the US’s largest crypto exchange by trading volume – has noted that crypto can instead be used as a tool to promote sanction compliance.
Coinbase is complying with sanctions, says CLO.
In a blog post published Monday, Paul Grewal, the chief legal officer at Coinbase, revealed that the exchange is following the directives of governments around the world and implementing a multi-layered, global sanctions program.
Grewal noted that Coinbase considers compliance with sanctions to be a critical part of its goal to earn trust in the market. Sanctions are also essential to promote national security, hence it was up to governments to decide when, where, and how they are applied, he added.
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 program includes steps to block access to sanctioned actors, and detect attempts at evasion. It does this by using Know Your Customer (KYC) to screen new and existing users that are included in the international sanction lists. Coinbase also uses geofencing to prevent IP addresses from sanctioned territories from accessing the exchange.
Similarly, the exchange is actively on the lookout for potential threats Grewal noted. Coinbase keeps tabs on sanctioned entities who may try to evade sanctions using crypto, even if they do not have accounts on the exchange.
The legal adviser also highlighted that crypto had a very small likelihood of being used to evade sanctions. This is because of the several characteristics of cryptocurrencies and blockchain technology.
Some of these include the fact that crypto transactions are public, traceable, and permanent. Public blockchains offer more opportunities to fish out bad actors than cash does, he opined.
The crypto industry will continue promoting financial freedom
Coinbase is not the only exchange that has made a statement about compliance with sanctions and the crisis in Ukraine. Binance, KuCoin, FTX, and Kraken have been vocal about the same issue. Even countries like Singapore has complied with the sanction rules.
However, a recurring theme in their statements is a refusal to place a blanket ban on all Russians. The exchanges have noted that doing so would be against the principle of the existence of crypto.
Coinbase’s CLO also noted this, saying:
Coinbase helps everyday people to protect, build, and share their wealth through crypto technology.
This is the sentiment that has previously been noted by Brian Armstrong, the CEO of Coinbase, who noted that only a US directive will make Coinbase sanction “ordinary Russians.”
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Source: https://coingape.com/%E2%80%AAcoinbase-restricts-25000-addresses-connected-russian-crypto-holders/