Binance says it will not freeze Russian and Belarusian user accounts

As the conflict between Russia and Ukraine intensifies, the crypto community has stepped in through donations to support Ukrainians. However, most crypto community members have maintained that the sector is not taking sides.

On February 27, the vice prime minister of Ukraine, Mikhail Fedorov, urged cryptocurrency exchanges to freeze the accounts of Russian and Belarusian users.

Binance will not block Russian and Belarusian users

In an announcement issued to CNBC by a Binance spokesperson, the exchange giant will not “unilaterally” freeze Russian user accounts. “We are not going to unilaterally freeze millions of innocent users’ accounts,” the spokesperson said. 

They also added that the entire concept behind cryptocurrencies was to boost financial freedom for people globally. Therefore, freezing the accounts of users and restricting them from accessing their crypto assets was against the reason why crypto existed.

Fedorov had earlier tweeted,

I’m asking all major crypto exchanges to block addresses of Russian users. It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users.

Russia is currently facing heavy sanctions from the US and its allies. A Binance spokesperson has said that the exchange will “take action against those that have had sanctions levied against them while minimizing impact to innocent users.” Binance has also said it will block the accounts of individuals included in the sanctions.

Other crypto firms weighing in

The CEO of Kraken, Jesse Powell, also weighed in on a request to ban and freeze Russian and Belarusian users. Powell responded to the request saying,

I understand the rationale for this request, but, despite my deep respect for the Ukrainian people, [Kraken] cannot freeze the accounts of Russian clients without a legal requirement to do so.

However, a Ukrainian crypto startup has already blocked users from Russia and Belarus. DMarket, a firm that deals in non-fungible tokens, has said that the accounts of Russian and Belarusian users have been frozen due to the invasion.

Cryptocurrencies have been deemed free from government interference, as seen during the Canada Freedom Convoy protests. However, the freedom lies in self-custodial wallets, as exchanges could be forced to comply with local regulations.

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