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Crypto-currency trading platform Coinbase has blocked 25,000 wallet addresses related to Russia.
The platform said the addresses were related to Russian individuals or entities it believed to have engaged in illicit activity.
The addresses were blocked over fears crypto-currency could be used to evade sanctions.
Coinbase's chief legal officer, Paul Grewal, made the announcement on a company blog.
He outlined how the crypto exchange was complying with new rules imposed because of the Russia's invasion of Ukraine.
It means no access for sanctioned individuals and includes "sophisticated blockchain analytics" to identify accounts indirectly linked to banned users.
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"Coinbase blocks over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own proactive investigations," Mr Grewal wrote.
"We shared them with the government to further support sanctions enforcement.
"Sanctions play a vital role in promoting national security and deterring unlawful aggression and Coinbase fully supports these efforts by government authorities."
The US government had asked crypto platforms to help ensure Russian oligarchs could not use virtual currencies to avoid sanctions.
But many are resisting pressure from both Ukraine's government and US and European politicians to go further and ban all Russian users, amid concern normal Russians might be using crypto-currency as a lifeline after the value of the ruble sank to a record low.
Shutting down Coinbase's operations in Russia would just hurt ordinary citizens, chief executive Brian Armstrong said.
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"We are not pre-emptively banning all Russians from using Coinbase," he tweeted.
"We believe everyone deserves access to basic financial services unless the law says otherwise."
Russia is becoming increasingly isolated from the larger non-crypto financial systems.
Visa, Mastercard and American Express have suspended all operations in Russia.
All three said cards issued abroad would no longer work at shops or cash machines in Russia.
But Russia downplayed the impact of the suspension, suggesting cards issued by Russian banks would continue to work inside Russia, as transactions could be handled by a domestic operator.And some Russian banks, including Sberbank and Alfa-Bank, said they might issue co-badged cards linked to Russia's Mir and China's UnionPay international payment systems.
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I'm an expert in cryptocurrency and blockchain technology, having extensively studied and analyzed the industry trends, regulations, and market dynamics. My knowledge is backed by a deep understanding of the technical aspects as well as the broader economic and legal implications of cryptocurrency trading.
The recent news about Coinbase blocking 25,000 wallet addresses related to Russia is a significant development in the context of the ongoing geopolitical events, particularly Russia's invasion of Ukraine. This action by Coinbase demonstrates a proactive approach to comply with new rules imposed due to the conflict.
Coinbase's Chief Legal Officer, Paul Grewal, outlined the company's commitment to preventing the illicit use of cryptocurrency, specifically by individuals or entities related to Russia. The platform employed "sophisticated blockchain analytics" to identify and block addresses indirectly linked to banned users. This indicates Coinbase's dedication to adhering to regulatory requirements and supporting sanctions enforcement.
Sanctions are highlighted as a vital tool for promoting national security and deterring unlawful aggression, and Coinbase is positioned as a responsible actor supporting these efforts by cooperating with government authorities. The company not only blocked the addresses but also shared information with the government to strengthen sanctions enforcement.
The context of the broader industry is important here. The U.S. government has urged crypto platforms to help prevent Russian oligarchs from using virtual currencies to circumvent sanctions. However, Coinbase's decision to target specific addresses rather than imposing a blanket ban on all Russian users reflects a nuanced approach. The platform is cautious not to penalize ordinary citizens who might be using cryptocurrency as a financial lifeline amid the economic challenges faced by Russia.
The resistance against banning all Russian users is evident in Coinbase CEO Brian Armstrong's statement, emphasizing that everyone deserves access to basic financial services unless the law dictates otherwise. This stance aligns with the company's commitment to providing financial services while navigating the complexities of geopolitical and regulatory landscapes.
Furthermore, the article touches on the broader isolation of Russia from non-crypto financial systems, with major card networks like Visa, Mastercard, and American Express suspending operations in the country. This move contributes to the financial isolation of Russia, raising questions about the impact on ordinary citizens.
In conclusion, Coinbase's actions in blocking specific wallet addresses related to Russia showcase the platform's commitment to regulatory compliance, responsible financial practices, and its awareness of the potential impact on ordinary users amid geopolitical tensions. This development is part of a larger narrative involving the intersection of cryptocurrency, geopolitics, and financial regulations.
