CEXs and CEOs from businesses like Binance, Coinbase, and Kraken have all declared that they will solely freeze the assets of Russian clients targeted by Western sanctions, not the assets of common Russian consumers.
Ukraine’s minister of digital transformation, Mykhailo Fedorov, had called on “all major crypto exchanges to block [wallet] addresses of Russians” and “also to sabotage ordinary users [by freezing their funds]” just days before. Brian Armstrong, CEO of Coinbase, notably wrote: In explaining why he was not prematurely banning all Russians (albeit Coinbase is not available in Russia), he specifically wrote:
“Unless the law says differently, we believe that everyone deserves basic financial services.” Now that their currency has collapsed, some regular Russians are utilising crypto as a lifeline. Many of them are likely to reject their country’s actions, and a ban would harm them as well.”
“If the United States government decides to implement a ban, we will, of course, comply with those laws,” Armstrong added. Kraken CEO Jesse Powell reinforced the thoughts expressed in this message, saying:
“Without a legal obligation to do so, Kraken cannot freeze the accounts of our Russian clients. The Russians should be aware that such a regulation may be on the way.”
Russian bank cardholders will be unable to use their cards on the site
Individuals who have not been sanctioned appear to be affected by sanctions. Binance had notified the day before that sanctioned Russian bank cardholders will be unable to use their cards on the site. In response to requests for CEXs to crack down on Russian consumers, Redditor u/Sammy12xyz noted the issue Iranian crypto fans face on Friday, claiming:
“Iranian accounts already hacked. For the past two years, we’ve been blocked from Binance, and no one has mentioned anything. Do you think we’re not guilty?”
Regardless of the fines, it appears that there are a few, albeit limited, techniques to get around them. One KuCoin moderator put it this way:
“Iranians are welcome to utilise our exchange, however, KYC [Know Your Customer] is not available. If you prefer to proceed without completing KYC, you may still use our exchange as usual. Even if you are not verified. Unverified accounts, on the other hand, will have a withdrawal restriction of 5 BTC per 24 hours.”
Furthermore, VPNs are supposedly capable of circumventing CEX limitations on Iranian IP addresses. One Iranian crypto enthusiast claimed that cryptocurrencies such as Bitcoin (BTC) required to buy VPNs in Iran. However, such firms do not accept fiat payments from Iranians due to sanctions.