Should Crypto Exchanges Ban Russian Users? Kraken’s Opinion


Amongst the fundamental values of crypto, an important point is having financial freedom for all. Crypto is meant to be an unbiased tool, untied to the strings of governments and banks, a tool against oppression and authoritarianism.

If your money can be taken away from you by regimes and governments, is it truly your money? This is why people nowadays think that bitcoin is the only real money.

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But some think crypto exchanges should face a moral quandary: can you be unbiased when it comes to war crimes? Should the platforms comply with economic sanctions?

Related Reading | Binance To Freeze Sanctioned Russians Accounts

Ukraine Asks For Help

Following recent sanctions on Russia, Vice Prime Minister of Ukraine Mykhailo Fedorov asked all top crypto exchanges to block the accounts of all Russian and Belarusian clients, not just politicians.

As Bitcoinist reported earlier, the large exchange Binance agreed to freeze accounts of those on the sanctions list to ensure that all sanctions are met in full, but they will not be blocking the accounts of regular Russian users.

The exchanges Kranken, Coinbase, KuCoin, and others, have responded in similar ways, citing their mission to provide economic freedom. It’s a crucial time to know whether users can trust crypto exchanges to carry the fundamental values many believe in.

On one hand, the exchanges have been heavily criticized for what some people think is putting profit over people.

Strategically, many fear the actions imposed on Russia will not be enough to stop their invasion of Ukraine. The intent to financially asphyxiate Russia sacrifices the balance of the world’s economy (meaning higher inflation) for the good of humanity, and that can be applauded for it also puts the greater wellbeing as a priority by avoiding a much larger war.

But one must also stop to think about all the people who suffer the consequences of the Russian-Ukrainian war. Russian citizens live under an authoritarian regime. The anti-war protests in the country have grown exponentially, and so have the arrests.

Many Russians are ashamed, enraged, and do not have the tools to face their violent and oppressive regime.

These are also the Russians who will suffer from financial sanctions.

Will Exchanges Protect Financial Freedom

After Canada imposed a block on crypto users linked to the anti-vax convoy protests, Kraken CEO Jesse Powell advised users to get their money off exchanges as the platforms can be forced to comply with certain measures, having to freeze assets without judicial consent.

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Related Reading | Could Canada Turn Anti Bitcoin? Behind The Layers Of Trudeau

“We cannot protect you. Get your coins/cash out and only trade p2p.”

Now, he responded to Vice Prime Minister Mykhailo Fedorov:

I understand the rationale for this request but, despite my deep respect for the Ukrainian people, Kraken 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.

That requirement could come from your own government, as we have seen in Canada, in response to protests, bank runs and attempts to flee the country. It could come from foreign states, like the US, as a weapon to turn the Russian populace against its government’s policies.”

Powell believes most of Kraken’s crypto holders are anti-war because “Bitcoin is the embodiment of libertarian values, which strongly favor individualism and human rights.” But as much support as exchanges can seemingly give BTC, it means nothing when it comes to compliance. Bitcoin offers full financial freedom, centralized exchanges cannot.

Powell says that in the crypto world “arbitrary lines on maps no longer matter” and users “don’t have to worry about being caught in broad, indiscriminate wealth confiscation.”

“Sometimes the hardest thing about having power is knowing when not to use it.”

The CEO claims Kraken focuses on “individual needs above those of any government or political faction,” and added that “The People’s Money is an exit strategy for humans, a weapon for peace, not for war.”

“Besides, if we were going to voluntarily freeze financial accounts of residents of countries unjustly attacking and provoking violence around the world, step 1 would be to freeze all US accounts. As a practical matter, that’s not really a viable business option for us.”

That is an admirable political and ethical stance to take. However, Powell makes it clear that the platform can be forced to comply. No matter what today’s stance was, an official move of tomorrow might tell a very different story, one that could be disastrous for people, exchanges, and freedom.

This highlights the problem with centralization. If it’s that easy to force you to comply, then what you offer to people at the risky points of history may not be as different from what banks already do.

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Crypto market cap at $1.8 trillion | Source: TradingView.com




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