Russian Crypto Users Bear the Brunt of Putin War on Ukraine

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Crypto wallet company will block Russian users on Oct. 27, 2022, following the latest European Union sanctions.

According to the wallet provider, it is also not allowed to offer custody and rewards products to Russian clients, the most recent of which is an ETH staking program offering a 5% annual yield.

The company, which provides 84 million crypto users globally with both custodial and self-custodial wallets, joins Dapper Labs and P2P exchange LocalBitcoins in enforcing new sanctions against Russia introduced by the European Union on Oct. 6, 2022. 

The new sanctions follow a ruling by Russian officials legalizing cross-border crypto payments.

Earlier sanctions had limited crypto transfers from Russian wallets to wallets belonging to EU entities to $9,700.

Under the eighth sanctions package, the EU has banned all cross-border crypto transactions between itself and the Russian Federation following the Kremlin’s annexation of certain parts of Ukraine that much of the international community has labeled as a sham. The ban applies to crypto wallets, custodial services, and accounts, regardless of the amount of crypto they hold. 

Daniil Chebykin, who heads up a civil rights organization in Russia, was reportedly contacted by on Oct. 14, 2022, notifying him that he had about two weeks to withdraw his funds. Chebykin had been raising money using crypto for the organization dedicated to curbing the recruitment of Russian citizens into the war.

On Oct. 7, 2022, Finland-based P2P exchange LocalBitcoins announced new sanctions restricting all activity by Russian citizens on its platform, which is set to reduce the exchange’s monthly trading volume by at least 8% in October 2022. Notably, LocalBitcoin’s restrictions do not apply to Russians holding citizenship or permanent residence in the EU.

Dmitry Suharev, an editor for a Russian news site, reportedly received an email from LocalBitcoins on Oct. 8, 2022, saying that he could withdraw his bitcoin from the platform in a single transaction. His account would then be inaccessible, he was told.

Dapper Labs paused trading for accounts linked with Russia without closing the accounts.

Binance may soon comply with EU sanctions

Earlier this year, crypto exchanges Coinbase and Binance said they would not support a blanket ban on Russian citizens, choosing to block specific accounts with Russian ties.

At press time, neither Binance nor Coinbase had officially enforced the new sanctions package, but one Russian CEO believes it is just a matter of time:

Russian ranks ninth in Chainalysis’ Global Crypto Adoption Top 20 Index. 

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here


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