Coinbase Blocks 25,000 Accounts Linked to Russia

Coinbase backed up the sanctions against Russia and revealed the extent to which it works with governments, stating it has blocked over 25,000 accounts linked to Russians the company believes are undertaking an illicit activity.  

“Many whom we have identified through our proactive investigations,” the company said in a blog post.  

“Once we identified the addresses, we shared them with the government to further support sanctions,” it added.  

Coinbase’s Chief Legal Officer (CLO) Paul Grewal said many of the accounts had been identified through the exchange’s own “proactive” investigations.  

As such, the move is part of a broader response to the Russian assault on Ukraine, in addition to sending addresses to the U.S. government to “further support sanctions enforcement.”  

“Sanctions play an important role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities,” the post said.  

The move comes days after Coinbase CEO Brian Armstrong said in a tweet that last Wednesday, his company didn’t think there is a “high risk” of Russian oligarchs using crypto to avoid sanctions.  

Coinbase also claimed that digital assets can “naturally deter common approaches to sanctions evasion.”  

“By transacting through shell companies, incorporating in known tax havens, in addition to leveraging opaque ownership structures, bad actors continue to use fiat currency to obscure the movement of funds,” it said.  

“They leave complex financial trails that are difficult to trace, which requires investigators to request information from many financial institutions and follow a trail across multiple countries,” the platform added.  

The exchange said that due to blockchains’ public, immutable, and traceable nature, it is possible to trace transactions without getting information from multiple parties.  

By contrast, crypto and digital asset transactions are “traceable, permanent and public” and “enhance” Coinbase’s ability to “detect and deter” evasion when compared to the traditional financial system, it said.  

Coinbase has been criticized in the past, particularly from the digital rights group Electronic Frontier Foundation in 2020 over how the exchange manages requests by law enforcement for users’ private financial data.