Brian Armstrong, CEO of Coinbase has announced that his crypto exchange is ready to clamp on all Russian users should the U.S. government decide to impose a ban.
In a Friday post on Twitter, Armstrong expressed disinterest in having run-ins with the U.S. in its efforts to have Russia recede its actions on Ukraine through sanctions.
“Every US company has to follow the law,” Armstrong wrote, noting that they empathized with concerns that some sanctioned entities could use crypto to evade sanctions. “It doesn’t matter if your company handles dollars, crypto, gold, real estate, or even non-financial assets. Sanctions laws apply to all US people and businesses.”
According to him, it is a mistake for crypto firms to think that they are above the law as it would beat the logic of rigorously screening customers against global watchlists and blocking transactions from IP addresses that might belong to sanctioned individuals and entities.
Armstrong, however, argued that the idea that Russian oligarchs could use crypto to avoid sanctions was a little farfetched. “It is an open ledger,” he went on, “trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets.”
The National Security Council’s director of cybersecurity, Carole House, said on Wednesday that due to transactional traceability on the blockchain, Russia might not be able to use cryptocurrency on large scale to evade sanctions. According to her, it “would almost certainly render cryptocurrency as an ineffective primary tool for the state.”
This has also been the position of the U.S. Department of Treasury. Todd Conklin, counselor to the deputy Treasury secretary recently noted that they were not deeply concerned about the Kremlin using crypto to bypass financial sanctions.
“The scale of what they have to move, and where they have to move things from, [crypto’s] not necessarily going to be that concerning” Conklin was quoted saying.
That said, while Coinbase has no intention of preemptively banning all Russians from using its services, Armstrong stated that they were ready to impose a blanket ban on all Russian users if the order came in.
“We believe everyone deserves access to basic financial services unless the law says otherwise.” However, “ If the US government decides to impose a ban, we will, of course, follow those laws.