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Coinbase Has Blocked 25K Russian Crypto Addresses

Date:

March 8, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

  • President Joe Biden is expected to sign a crypto executive order this week.

  • FTX announced that it would start offering services to European clients soon.

  • Ukraine is using a multisig wallet to spend crypto donated to the country.

  • Crypto investment fund inflows reached their highest level in three months for the week ending March 4.

  • Coinbase will label some assets as “experimental” to boost transparency.

  • Total value locked on Fantom has plummeted since Andre Cronje’s retirement announcement.

  • Binance resumed bank transfers for account holders in Europe after eight months.

  • Axie Infinity increased its marketplace fees to generate more revenue for content creators.

Today in Crypto Adoption…


The $$$ Corner…

  • Immutable, an Ethereum L2 solution, raised $200 million at a $2.5 billion valuation.

  • Griffin Gaming Partners raised a $750 million fund with plans to invest at least part of it into web3.

  • Space Runners, a blockchain-based fashion company, raised$10 million in a round led by Pantera Capital and Polychain Capital.

What Do You Meme?

Coinbase Has Blocked 25K Russian Crypto Addresses Blockchain CoinGenius Hosts Virtual Crypto Event The Road To Mass Adoption


What’s Poppin’?

Coinbase, the second-largest cryptocurrency exchange in the world, announced on Monday that it has blocked 25,000 addresses related to Russian individuals or entities it believes to be engaging in illicit activity.

Notably, Coinbase stated that many of the addresses were identified “prior” to Russia’s invasion of Ukraine and that the exchange has “not seen a surge in sanctions evasion activity” in recent days. Coinbase reported that it has also shared its internal blocklist with the government to further support sanctions enforcement.

Paul Grewal, Coinbase’s chief legal officer who penned a blog post explaining the exchange’s stance on sanctions, does not believe that the crypto industry would be an efficient way for Russia to evade sanctions. He cites the traceability, publicity, and permanence of digital asset transactions as reasons why crypto is harder for bad actors to launder money via digital assets than fiat currency. Furthermore, Grewal believes the size of the crypto industry is too small for Russia to effectively leverage in evading sanctions.

“​​The Russian central bank alone holds over $630 billion in largely immobilized reserve assets. That’s larger than the total market capitalization of all but one digital asset, and 5–10x the total daily traded volume of all digital assets. As a result… circumventing restrictions on this scale would require massive purchases that would be prohibitively expensive and detectable, as this buying activity would likely lead to price spikes.”

In addition to the 25,000 Russian addresses on its blocklist, Grewal also revealed that Coinbase had identified more than 16,000 addresses possibly associated with Iranian exchanges. According to Grewal, Coinbase is working to enforce sanctions maintained by the United States, United Kingdom, European Union, United Nations, Singapore, Canada, and Japan.

Coinbase, for now, has no plans to place additional restrictions on regular Russian citizens. “We are not preemptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise,” wrote Coinbase CEO Brian Armstrong last week.

However, Armstrong clarified, if the US does ask Coinbase to do so, the exchange will comply. “Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too. That said, if the US government decides to impose a ban, we will of course follow those laws.”

Bonus stat:

If you were to pre-suppose that each address blocked by Coinbase was a Bitcoin address, which is most likely not the case, there are still 1,461,501,637,330,902,918,203,684,832,716,283,019,655,932,517,976 allowed to trade on Coinbase (as there are 2^160 total Bitcoin addresses).


Recommended Reads

  1. Not Boring’s Packy McCormick on Flow:

Coinbase Has Blocked 25K Russian Crypto Addresses Blockchain CoinGenius Hosts Virtual Crypto Event The Road To Mass Adoption

  1. Lyn Alden on money:

Coinbase Has Blocked 25K Russian Crypto Addresses Blockchain CoinGenius Hosts Virtual Crypto Event The Road To Mass Adoption

  1. The Human Rights Foundation’s Alex Gladstein on the invisible cost of war (and how Bitcoin can fix it):

Coinbase Has Blocked 25K Russian Crypto Addresses Blockchain CoinGenius Hosts Virtual Crypto Event The Road To Mass Adoption


On The Pod…

Tomicah Tillemann, the global chief policy officer of Katie Haun’s new firm, analyzes Russia’s invasion of Ukraine and explains how crypto is being used in an unprecedented manner to render aid to civilians, move money across the world, and potentially document war crimes. Show highlights:

  • Tomicah’s background, which includes stints working for the State Department and a16z

  • recap of Russia’s invasion of Ukraine

  • what Tomicah thinks of the decision to boot certain Russian banks from SWIFT

  • why Tomicah believes that it would be very difficult for Russia to use crypto at a large scale to evade sanctions

  • why ruble/BTC volume is spiking

  • how Ukraine’s usage of web3 tools could change humanitarian aid forever

  • what lessons to take away from Ukraine’s almost-airdrop

  • the four real-world crypto use cases governments should take notice of


Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!

You can purchase it here: http://bit.ly/cryptopians

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