Two of the biggest global crypto exchanges, Binance and Kraken, have refused to freeze Russian user accounts on their platforms following a request from Ukraine’s vice prime minister, Mykhailo Fedorov.

Fedorov, who is also the embattled nation’s minister of digital transformation, posted a tweet on Sunday that read:

“I’m asking all major crypto exchanges to block addresses of Russian users. It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”

Prior to that, the Ukrainian politician had been publicly seeking assistance, also via Twitter, to identify crypto wallets linked to Russian and Belarusian politicians.

“Ukrainian crypto community is ready to provide a generous reward for any information about crypto wallets of Russian and Belarusian politicians and their surroundings,” wrote Fedorov. “War crimes must be pursued and punished.”

Following Putin’s invasion of Ukraine late last week, the international community has responded with broad economic sanctions against the Russian economy and its government. This includes a ban on large Russian banks from the SWIFT global payments system.

Despite this, however, some suspect that Russia might be looking to use crypto as a means to get around the sanctions, and this is the source of Federov’s concern.


Binance and Kraken respectfully decline

“We are not going to unilaterally freeze millions of innocent users’ accounts,” a Binance spokesperson reportedly told CNBC today.

“Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists.”

Meanwhile, Kraken CEO Jesse Powell tweeted: “I understand the rationale for this request but, despite my deep respect for the Ukrainian people, Kraken cannot freeze the accounts of our Russian clients without a legal requirement to do so.”

Powell added, however, that Russians should be “aware” that this kind of requirement may be imminent.

A recent Bloomberg report noted that Russians own about 12 per cent of total global crypto holdings. As of December 2021, Russian citizens reportedly owned 16.5 trillion rubles (about US$174 billion at the time of writing) worth of crypto, according to Russian government estimates.

And the Russian market is big business for major crypto exchanges. According to Cointelegraph, which cites a Bank of Russia report, the country’s crypto market is Binance’s second-biggest after Turkey in terms of website traffic.

On Sunday, as reported by Stockhead, Binance revealed it’s committing a minimum of US$10 million to help ease the humanitarian crisis in Ukraine.

Furthermore, crypto donations have been flowing into Ukraine, with reportedly US$37 million now already raised through multiple crypto-funding initiatives for the nation, at the time of writing.