Ukraine plans a legal push to force crypto exchanges to freeze Russian accounts

According to The Block, a top Ukraine regulator said that the country’s planning to make legal demands on crypto exchanges. The goal is to restrict access to cryptocurrency for all Russian citizens following last week’s military invasion.

Ukraine to issue legal demands on crypto exchanges to freeze Russian accounts

After Mykhailo Fedorov, Ukraine’s deputy prime minister and minister of digital transformation, called on exchanges to block the accounts of both Russian and Belarusian users yesterday, many said they could not comply without legal protection.

Now, Ukraine is increasing the pressure. Kraken CEO Jesse Powell, for one, said the exchange “cannot freeze the accounts of our Russian clients without a legal requirement to do so.” Similarly, Binance told Reuters that it was “not going to freeze millions of innocent users’ accounts unilaterally.”

“We plan to make legal demands. We are preparing letters,” Yulia Parkhomenko, head of the virtual assets expert group at the Ministry of Digital Transformation of Ukraine, told The Block. When asked whether it was right to target Russian citizens — particularly with many opposing the war — Parkhomenko said, “This is a necessary measure. There is no way to identify who is financing the war and who is not.”

While Powell said that such a regulatory requirement is necessary before the exchange can restrict accounts, he seems to oppose the move, arguing that many of Kraken’s customers are resistant to wear. He stated that cryptocurrencies transcend borders and that crypto users should not have to worry about widespread, indiscriminate asset confiscation.

Powell has previously encouraged his following people to consider pulling their cryptocurrencies out of exchanges – including Kraken – if they are concerned about regulatory enforcement. At the time, he said, “If you’re worried about it, don’t keep your funds with any centralized/regulated custodian. We cannot protect you.”

While asking crypto exchanges to block Russian accounts, Ukraine has adopted cryptocurrency for its benefit. To date, it has received over $9 million in crypto donations.

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