Coinbase will not ban all cryptocurrency transactions in Russia

Some Russians are using digital tokens as a lifeline after their currency’s collapse, chief executive Brian Armstrong says

Coinbase will keep working to enable cryptocurrency services for the people of Ukraine who are in need of help. Bloomberg

Live updates: follow the latest news on Russia-Ukraine

Digital asset trading platform Coinbase will not ban all cryptocurrency transactions in Russia as people affected within the Ukraine-Russia conflict zones are increasingly turning towards these tokens to keep their money accessible, chief executive Brian Armstrong said.

“We are not pre-emptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise,” Mr Armstrong said on Twitter on Friday.

“Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed.”

Ukraine, which has received donations worth $33.8 million in digital currency since the start of Russia’s military offensive, has requested cryptocurrency exchanges such as Coinbase and Binance to impose a blanket ban on Russian users.

Investors at large are viewing cryptocurrencies as a good place to store assets amid volatility created by the Russia-Ukraine crisis.

The daily volume of Bitcoin trading in both the rouble and the Ukrainian hryvnia has risen to about 270 per cent, according to research from Bankless Times.

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  Damage after the shelling of buildings in central Kharkiv, Ukraine. EPA

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  Workers from a local construction company weld anti-tank obstacles to be placed on roads around Kyiv as Russia's invasion of Ukraine continues. Reuters

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  Anti-war protesters attach sunflowers to barriers in front of the Russian embassy. Reuters

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  Ukrainian volunteers prepare food for displaced people outside Lviv railway station in western Ukraine. AP

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  A Ukrainian soldier holds an anti-tank launcher north-east of Kyiv. AFP

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  A girl who fled Ukraine is reunited with her father in Medyka, south-eastern Poland. AP Photo

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  Tears outside a house damaged by a Russian airstrike in Gorenka, on the outskirts of Kyiv. AP Photo

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  A civil defence member is poised to shoot as a vehicle approaches a checkpoint in Gorenka. AP Photo

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  A Ukrainian civil defence member in the garden of a house damaged by a Russian airstrike. AP Photo

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  Members of the US Army 3rd Infantry Division board a plane bound for Germany in Savannah, Georgia. EPA

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  Prayers for peace in Ukraine at the Vatican's Saint Peter's Square. AFP

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  A woman (right) hugs an arriving passenger from a train carrying refugees at Berlin's central station. EPA

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  Firefighters battle a blaze in a Kharkiv police building hit by shelling. AFP

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  A Ukrainian woman makes a phone call after crossing the Slovakian border. AFP

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  Debris which locals say was caused by shelling in separatist-controlled Horlivka, Donetsk. Reuters

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  MPs in London give a standing ovation to Ukraine ambassador Vadym Prystaiko, who was in the public gallery. AP

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  Distraught women and children fleeing Ukraine wait to enter Poland at the Korczowa crossing. Getty

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  Newborn Ivan lies next to his mother as they shelter in the basement of a Kyiv perinatal centre. Reuters

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  Firefighters hand water to people in a Ukrainian train full of refugees in Przemysl, Poland. Reuters

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  Ukrainian refugees queue to file for residency permits at Prague's police headquarters. AFP

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  Firefighters work to contain a blaze in buildings housing the Kharkiv regional police department. AFP

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  A woman and her children sit in a tent in the Kyiv subway, using it as a bomb shelter. AP

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  Firefighters work to extinguish a blaze at the Kharkiv National University building, which city officials said was damaged by Russian shelling. Reuters

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  An elderly woman comforts a child as they take shelter inside an underground station in Kyiv. Reuters

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  People queue at a pharmacy in central Kyiv. Reuters

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  A woman is consoled by a volunteer after fleeing from Russia's invasion of Ukraine, at the border crossing in Siret, Romania. Reuters

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  Ukrainian President Volodymyr Zelenskyy poses after an interview with Reuters in Kyiv. Reuters

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  Ukraine's ambassador to the US, Oksana Markarova, acknowledges applause from US first lady Jill Biden as they attend President Joe Biden's first State of the Union address in Washington. AFP

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  A man walks past the remains of Russian military vehicles in Bucha, close to Kyiv. AFP

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  Civilians cross a river on a blown-up bridge on Kyiv's northern front. Defending the capital is a 'key priority', Ukraine's president has said. AFP

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  Russian aircraft on the ground at Luninets Airbase, Belarus, about 50 kilometres north of the Ukrainian border. AFP

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  People look at the gutted remains of Russian military vehicles on a road in the town of Bucha. AP

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  A woman with a child who fled from the war in Ukraine reunite with their family after crossing the border in Medyka, Poland. AP

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  Animal keeper Kirilo Trantin comforts an elephant at Kyiv Zoo. AP

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  Ukrainian families say goodbye as they prepare to board a bus to Poland at Lviv, western Ukraine. AP

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  Rescuers work at the site of a Russian strike in Zhytomyr. Reuters

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  US actor and director Sean Penn attends a press briefing at the Presidential Office in Kyiv. Reuters

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  Demonstrators participate in a protest against Russia’s invasion of Ukraine at Lafayette Square in Washington. AFP

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  Members of the European Parliament applaud after Ukrainian President Volodymyr Zelenskyy's speech at a special session to debate its response to the Russian invasion of Ukraine. Reuters

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  Ambassadors and diplomats walk out as Russia's Foreign Minister Sergey Lavrov (on screen) speaks during a recorded message at the 49th session of the UN Human Rights Council in Geneva. EPA

After initially falling to about $34,000 following Russia’s advance into Ukraine, Bitcoin has surged about 25 per cent since February 24. It was trading at $41,410 at 10.54pm UAE time on Friday.

“Bitcoin is giving back the early week gains as it becomes clearer by the day that it won’t be a hassle-free safe haven to investors as the western forces are going after the coin to impose strict regulations to prevent Russians from going around the sanctions that are imposed to them,” Ipek Ozkardeskaya, senior analyst at Swissquote, said on Friday.

It becomes clearer by the day that Bitcoin won’t be a hassle-free safe haven to investors as the western forces are going after the coin to impose strict regulations

Ipek Ozkardeskaya,
senior analyst at Swissquote

“The price of a coin is headed towards the $40,000 mark and it is likely we [will] start seeing Bitcoin trade parallel to the risk assets yet again.”

Ether, the second-largest cryptocurrency, was trading at $2,725 at 10.55pm UAE time. It has surged 1.4 per cent in the past five days.

Many Russians probably oppose what their country is doing and a ban on cryptocurrencies would hurt them too, Mr Armstrong said.

“That said, if the US government decides to impose a ban, we will, of course, follow those laws,” he tweeted.

Meanwhile, Coinbase will keep working to enable cryptocurrency services for the people of Ukraine who are in need of help, Mr Armstrong said.

He ruled out the possibility of Russian oligarchs using cryptocurrencies to avoid sanctions.

“Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using US dollars cash, art, gold or other assets,” Mr Armstrong said.

Unlike fiat currencies, which must be moved through various third-party institutions, cryptocurrencies can be transferred from one user to another, dodging government sanctions and other restrictions.

“It would be a mistake to think crypto businesses like Coinbase won’t follow the law. Of course, we will,” he said.

Coinbase screens people who sign up for services against global watch lists and as is the case with any other regulated financial services business, blocks transactions from IP addresses that might belong to people or entities under sanctions, Mr Armstrong said.

Russia’s economy has taken a hit after the US and its allies took punitive actions against Moscow after its decision to undertake a military operation in Ukraine.

Russian companies and oligarchs in President Vladimir Putin’s inner circle have their assets frozen while European countries have closed their airspace to Russia’s private and commercial aircraft.

Some Russian banks have also been barred from the Swift global financial network while the US Treasury has prohibited Americans from engaging in transactions with the Bank of Russia, the Russian Direct Investment Fund and the country’s Ministry of Finance.