Crypto Exchanges in a Tough Spot Amid Russia-Ukraine Conflict
After Russia's invasion of Ukraine was met with sanctions from the United States, the European Union, and the United Kingdom, those who fight for financial inclusion are being pressured to choose sides.
This pressure erodes their claim to be borderless and nondiscriminatory, in contrast to centralized finance.
At the same time, they don't want to offend either the regulators or some of their customers who donate to help the Ukrainians.
Cryptocurrency exchanges are in a difficult situation, especially since they have been openly questioned by Ukrainian authorities.
"I'm asking all major crypto exchanges to block addresses of Russian users," Ukrainian Vice Premier minister Mykhailo Fedorov posted on his Twitter account. "It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users."
The majority of established digital currency exchanges have turned down this request while stating that they had donated to Ukraine.
Binance, the world's largest cryptocurrency exchange, said that it has donated $10 million to United Nations groups to assist Ukrainians.
"I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so," Jesse Powell, CEO of crypto exchange Kraken responded on Twitter.
He added that:
"The People's Money is an exit strategy for humans, a weapon for peace, not for war," referring to crypto.