Coinbase blocks 25,000 Russian addresses: What does this mean

(pic credits watcher.guru)

The war in Ukraine is one of those moments in history that will inevitably shape the way we do or see things, even in the Crypto- sphere.

As US, EU, and other countries started imposing sanctions to Russia many have been pondering whether Russia can circumvent those sanctions by turning to Crypto.

Coinbase, one of the largest Centralized Crypto Exchanges, announced yesterday that it was blocking 25,000 wallet addresses on the platform that were linked to Russia. According to the company's announcement the reasoning behind the block was the engagement of these accounts in illicit activities.

Coinbase, a US registered company, has to abide by US laws and cannot do business with companies or individuals under the US sanctions list.

Until now both Coinbase and Binance have pushed back on the idea of banning their Russian users by saying that they do not want it intend to ban everyday Russian citizen and deprive them from the use of their services.

Despite that, Brian Armstrong, the CEO of the exchange, admitted that they will have to comply with US laws, and will be forced to ban users from the Russian Federation if the US government imposes rules to that effect.

Another interesting development is that Binance announced that it will make cards issued in Russia by MasterCard or Visa unavailable in its platform. This came as an effect of both Visa and MasterCard suspending their operations in Russia and cards issued in the country would no longer work outside the country.

Crypto transactions are too transparent and traceable in their nature since everything is recorded on a public ledger. This makes it difficult for Russian individuals or entities to dodge sanctions by using some of the large Crypto exchanges as on/off ramps for fiat.

Nevertheless, holding your crypto in custodial wallets (centralized exchanges and other platforms) means that you don't have full control over them and they can be blocked or seized at any moment by third parties. As the saying goes "not your keys, not your crypto".