In brief:
- Coinbase has blocked over 25,000 crypto addresses related to Russian individuals or entities believed to be engaged in illicit activities
- The addresses were identified through Coinbase’s blockchain analytics program
- Most of the crypto addresses had been identified before Russia invaded Ukraine on February 24th
- Blockchains are very transparent and provide a formidable tool for law enforcement
The popular U.S. crypto exchange of Coinbase has announced that it has blocked over 25,000 crypto addresses that it found to be related to Russian individuals or entities associated with illegal activities.
Coinbase managed to identify the addresses through its very own blockchain analytics program meant to ‘identify high-risk behavior, study emerging threats, and develop new mitigations’. This is what allowed Coinbase to block the 25k+ addresses with a majority of them having been identified before Russia invaded Ukraine on February 24th.
According to the Chief Legal Officer at Coinbase, Paul Grewal, the information on the crypto addresses was then shared with the U.S. government to further support sanctions enforcement. Mr. Grewal further pointed out that blockchain technology was very transparent thus allowing the exchange to assist law enforcement in rooting out bad actors. He said:
The transparency of the blockchain is a formidable tool for law enforcement, and platforms like Coinbase work very hard to partner with law enforcement to root out bad actors. There is also a legitimate interest in protecting the privacy of individuals — a public policy principle long recognized in the traditional financial system.
Mr. Grewal’s words on the transparency of blockchain technology, echo those of Coinbase CEO, Brian Armstrong, who had earlier clarified via Twitter, that the company did not ‘think there’s a high risk of Russian oligarchs using crypto to avoid sanctions’.
Mr. Armstrong went on to explain that blockchain technology operates on an open ledger. Therefore, ‘trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets.’