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Coinbase Has Blocked Well Over 25,000 Addresses Said to Be Linked with Illegal Russian Activity

Coinbase, the popular crypto exchange has stated that it has blocked 25,000 addresses that have all linked to some sort of illicit Russian activity.

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The crypto exchange named Coinbase has stated it’s blocked over 25,000 addresses that are linked to either Russian individuals or entities as they are believed to be linked to illicit activities of some sort.

The crypto exchange also added to that information the fact that these accounts were identified via its own “proactive investigations” and that the addresses in question have been promptly shared with the U.S. government in order to “further support sanctions enforcement.”

In a blog post published by the exchange, Paul Grewal said “In the past few weeks, governments around the world have imposed a range of sanctions on individuals and territories in response to Russia’s invasion of Ukraine. Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities.” Grewal is the Chief Legal Officer of Coinbase.

Grewal’s blog post mentions Coinbase taking aim to play its part in the support of the “critical economic sanctions” that are levied against Russian individuals as well as the entities amid the invasion of Ukraine.

In order to provide any kind of support, the crypto exchange said that it’s taking necessary steps to block access to not only sanctioned actors but also to detect attempts at sanctions evasion, as well as anticipation of threats. Involved in this are also procedures that would include checking potential customers against the list of sanctioned individuals or entities, not to mention tracking IP addresses that could or do belong to sanctioned parts of the world, North Korea being a good example of this.

A spokesperson on behalf of Coinbase was able to touch base with Decrypt last week, informing them that the exchange is working with industry-leading threat intelligence vendors with a strong focus on monitoring the risks that are emerging all over the world.

The blog post also delves into making the case for crypto technology and how it’s enhancing the sanctions compliance efforts, as well.

Per Coinbase, “digital assets have properties that naturally deter common approaches to sanctions evasion.”

Reportedly, these properties are inclusive of the public nature of blockchains which “offer unprecedented visibility into the details of transactions.”

Also highlighted by Coinbase here was the traceability of the blockchain systems as well as the fact that transactions are permanent in nature, immutable once they’re recorded on a blockchain.

“In addition to these technical advantages, adoption of digital assets is still nascent, making their use for widespread sanctions evasion—the kind that robs sanctions of their impact—unlikely, a fact recently noted by a national security expert.”

There’s also the question of crypto being used to undermine sanctions, too. There are, of course, several reasons why they can be used to elude economic sanctions, which is in fact a huge risk the U.S. Treasury has explored in the report that was published last October.

A prime example of this would be ransomware.

Crane Hassold, the current Director of Threat Intelligence at Abnormal Security, as well as a former FBI agent, sat down with Decrypt just recently, conversing with them about cryptocurrencies and how they were the “primary factor” in today’s Russia-led ransomware industry.

“[Cryptocurrency] essentially allows the overall ransomware payments that we’ve previously seen to scale to numbers that are pretty crazy,” he stated.

According to research from Chainalysis, roughly-three quarters of last year’s global ransomware revenue ended up with sources that are more than likely linked to Russia. Research conducted previously by the UN also uncovered that North Korea was able to part-finance its nuclear and ballistic missile programs via cryptocurrencies.

Of course, there’s also Bitcoin mining, which is an industry President Putin previously stated Russia has a “competitive advantage” in.

Notably, there’s always the risk of both sanctioned individuals and entities that are turning to non-compliant crypto exchanges, which is something that Russia-affiliated criminals have indeed done in the past.

David Carlisle, the Director of Policy and Regulatory Affairs over at Elliptic had this to say during an online webinar hosted recently, “We’ve seen instances before of crypto-asset exchange services that were complicit in enabling Russia-based criminals to launder large amounts of money…one was called SUEX.”

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