Key facts:
“We believe that a cryptocurrency exchange should not have the power to freeze accounts,” CZ said.
Binance is deactivating Russian user accounts holding more than EUR10,000.
Binance, one of the world’s leading cryptocurrency exchanges, announced that it is deactivating the accounts of its major clients in Russia. A decision with which its CEO, Changpeng Zhao (alias: “CZ”) does not agree, as he commented today via Twitter. But they had to take in the face of pressure from world institutions to financially “punish” the country for the war that began against Ukraine.
Binance communicated that, after the fifth package of restrictive measures of the European Union against Russia, the exchange is obliged to limit services for Russian citizens, natural persons residing in Russia and legal entities established in said country, who have crypto assets that exceed the value of 10,000 euros.
Accounts that fall under this restriction will be put into withdrawal-only mode, meaning they will no longer be able to use the platform for cryptocurrency trading.
Pursuant to these regulations, CZ said: “We believe that a cryptocurrency exchange should not have the power to unilaterally freeze the user accounts of an entire nation. And you must follow all penalty rules, old and new. The European Union has now taken a historic aggressive action and placed a limit of 10,000 euros on each user’s wallet residing in Russia.
Thus, The CEO of Binance made it clear that the European Union has led them to make the decision to block some accounts in Russia, despite not agreeing. In fact, in March, there was commented that, from an ethical point of view, many Russians do not support the war, so they should separate the politicians from the people who have nothing to do with the conflict.
Binance, like any centralized and regulated exchange, must take orders
“Binance gave its word to the global community that we would implement any and all sanctions actions and we are following through on that commitment,” CZ stated referring to the policies the European Union took. This is because it is a centralized and regulated cryptocurrency exchange, so it has the power to apply measures to the funds of its users.
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This situation is also reflected in the court order that the platform was recently forced to abide by on blocking users from Colombia. Something that, according to the lawyer Paula Bermudúz consulted by CriptoNoticias, cannot be denied as a company.
The same CEO of Binance commented almost two months ago: “Binance follows the sanctions rules very strictly. Whoever is on the sanctions list will not be able to use our platform. Who is not can do it. It is not our decision to freeze user accounts.”
Changpeng Zhao said world leaders must now do whatever it takes to end this “brutal conflict” and bring peace to the region. Mainly for its users, employees and other members of the Russian cryptocurrency community, he concluded.
Since the war began, banking institutions have blocked the accounts of Russians. Therefore, cryptocurrency platforms have become a possible place where citizens of the country can freely store and transfer funds. Although this only applies to self-custody wallets, since those governed by regulators are obliged to follow economic restrictions.