By Natalie Mojica

Cryptocurrency exchange platform Coinbase announced On March 6 that it is focused on making sure its financial exchange complies with new rules following the invasion of Ukraine. Chief Legal Officer, Paul Grewal, emphasized Coinbase is using “sophisticated blockchain analytics” to identify any accounts still active and linked to banned users.  

Coinbase found approximately 25,000 blocked accounts that were “related to Russian individuals or entities [believed] to be engaging in illicit activity.”

“Coinbase fully supports these efforts by government authorities,” said Grewal, “Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities.” 

Despite one of the main appeals of crypto wallets being their discretion and anonymity, Grewal pointed out that transactions are traceable, permanent, and public, so it’s much easier to find illicit activity than people realize.  

Senators like Sen. Elizabeth Warren (D-MA) are focused on making sure cryptocurrency companies follow the sanctions against Russia. Recently, she’s teamed up with Sen. Mark Warner (D-VA), Sen. Sherrod Brown (D-OH), and Sen. Jack Reed (D-RI) to write a public letter to Treasure Secretary Janet Yellen to urge compliance.  

“Strong enforcement of sanctions compliance in the cryptocurrency industry is critical given that digital assets, which allow entities to bypass the traditional financial system, may increasingly be used as a tool for sanctions evasion,” the letter noted. 

Industry giants like Apple, BP, and Shell imposed restrictions on Russia, and many Russian banks have been banned from SWIFT, the communications system that helps cross-border bank transfers. Over the past weekend, Visa and Mastercard also suspended their operations in Russia.

Some crypto companies like Binance disagree that they play a significant role; Changpeng Zhao, the founder, insisted crypto is “too small for Russia” and won’t be used as a tool for large-scale illicit transactions. Plus, not all the attention on cryptocurrency revolves around Russia. Cryptocurrency is also being used as a tool for fundraising for Ukraine, which has raised upwards of $54 million using Bitcoin and Ethereum.