The Russian government has been accused of using cryptocurrencies to evade sanctions imposed by Western countries.
The European Central Bank (ECB) has expressed concern that cryptocurrencies might be used to circumvent sanctions on Russia. Following the invasion of Ukraine in February, numerous governments around the world imposed sanctions on Russian entities and officials.
Multiple reports have suggested that the Russian government could use crypto assets to bypass those sanctions.
Binance CEO Changpeng Zhao recently disputed that claim in an interview with CNN. CZ told Richard Quest that cryptocurrencies cannot be effectively used to evade sanctions because blockchain technology provides high transparency.
He also noted that cryptocurrency exchanges and trading platforms are now strictly complying with government sanctions:
“I think the idea that crypto is being used to evade sanctions is a mess. If you look at the data, no smart actor would do that. Crypto is too traceable. Governments around the world are very good at tracking crypto transactions. So crypto is not suitable for that.”
Several leading exchanges, including Binance, Coinbase and Kraken, have declined calls from the Ukrainian government to freeze Russian users’ accounts.
The exchanges argue that blocking all Russian users from accessing crypto services would unfairly impact innocent individuals.
“We do not have the ability to freeze the assets of ordinary Russian users because that would be illegal for us. That must be decided by governments. We are absolutely opposed to the war. We are opposed to politicians and dictators who start wars. But we are not against the people. There are many suffering on both sides in Ukraine and Russia, and we want to help those people.”
Launched in 2017, Binance quickly grew into the world’s largest cryptocurrency exchange and remains the leading digital asset marketplace by daily trading volume.