Top Ukraine government official wants Russians’ crypto assets frozen

• Ukraine’s Vice Prime Minister has asked crypto exchanges worldwide to freeze assets held by Russian users
• Mykhailo Fedorov pointed at NFT platform DMarket that had already initiated such restrictions
• None of the major crypto exchanges has so far withheld ordinary user assets in Russia

In an occurrence that sparked contrasting emotion, Ukraine’s Vice Prime Minister, Mykhailo Fedorov, yesterday asked all global crypto exchanges to block addresses linked to users in Russia. Fedorov particularly insisted on ensuring that freeze actions had to also impact everyday users in addition to political leaders.

“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,” he said in a tweet, in the context of exerting more economic pressure on President Putin to stop Russia’s invasion of Ukraine.

Action’s already in play

The Vice Prime Minister cited the Ukraine-founded NFT platform DMarket that has frozen user assets and restricted registration on the platform by Russian and Belarus citizens.

“…DMarket, a platform for trading NFT & In-game Metaverse items, decided to freeze the accounts of users from the Russian Federation and Belarus. Funds from these accounts could be donated to the war effort. Nowadays Robin Hoods. Bravo,” Fedorov, who is also the Minister of Digital Transformation of Ukraine, said in a later tweet.

Announcing the decision earlier on, DMarket had explained that the Russia Ruble was no longer available on its platform. The marketplace clarified that all users would retain their holdings, only that access to them has been limited for the time being.

“Ukrainian-born startup DMarket cuts all relationships with Russia and Belarus due to the invasion of Ukraine. The registration on the platform is prohibited for users from Russia and Belarus. Accounts of previously registered users from these areas are frozen.”

Kraken might, but Binance won’t

On the other side of the divide, users argue that it beats the whole purpose of the financial freedom associated with using cryptocurrencies, should centralised exchanges limit access to Russians and Belarusians.

A representative from Binance has since told Reuters that the exchange does not intend to deter the freedom of crypto finance by freezing assets. The spokesperson explained that the exchange would instead work to ensure the already outlined sanctions are enacted with the least possible impact on innocent users.

“We are not going to unilaterally freeze millions of innocent users’ accounts. Crypto is meant to provide greater financial freedom for people across the globe.”

On his part, Kraken CEO Jesse Powell has today indicated that the exchange would not enact such a ban, but should a legal requirement (as recently issued by the Canadian government) to that effect come up, the crypto exchange’s stance could change.

“I understand the rationale for this request but, despite my deep respect for the Ukrainian people, Kraken Exchange cannot freeze the accounts of our Russian clients without a legal requirement to do so. Russians should be aware that such a requirement could be imminent,” the CEO noted.