The cryptocurrency exchange Coinbase has addressed the company’s procedures toward complying with sanctions in a blog post published on Sunday. The crypto firm says that respecting sanctions plays a “vital role in promoting national security” and the acts can help deter “unlawful aggression.”
Coinbase intends to comply with international sanctions, says chief legal officer, “digital assets have properties that naturally deter sanctions evasion”
Following statements from the two CEOs of two of the largest crypto exchanges on the planet, Coinbase published a blog post regarding the company’s goals in promoting sanctions compliance. The post was authored by Coinbase Chief Legal Officer Paul Grewal, and he touched on the current conflict in Ukraine. Essentially, the gist of the article emphasizes that “Coinbase is committed to sanctions compliance.”
“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,” Grewal’s post details. “Sanctions play a vital role in promoting national security and deterring unlawful aggression, and Coinbase fully supports these efforts by government authorities. Sanctions are serious interventions, and governments are best placed to decide when, where, and how to apply them.”
The Coinbase exec’s post further explains that crypto assets have “specific properties that naturally deter common sanctions-busting approaches.” This is because most blockchains are public, auditable, and traceable. When it comes to traceability, Grewal explains, when applied to public blockchain data, “analytics tools provide additional capabilities for law enforcement.” Moreover, blockchains have permanence, summarizes Grewal’s blog post, as the legal director states:
Once recorded on the blockchain, transactions remain immutable. No one (not crypto companies, not governments, not even bad actors) can destroy, alter, or withhold information to evade detection.
Coinbase has blocked over 25,000 addresses linked to Russian individuals and entities
The Coinbase blog post is very much in line with the large number of companies complying with sanctions and cutting ties with Russia. In the past 13 days, companies such as Netflix, Apple, Google, Tiktok, BP, Exxon, Equinor, Shell, Boeing, Airbus, Ford, Renault, Mercedes-Benz, Toyota, Visa, Mastercard, American Express, Dell, Meta, Ikea and Nike complied with international sanctions or severed ties with the Russian Federation.
Grewal notes in the company blog post that sanctioned individuals or entities are checked for during the onboarding process at Coinbase. The crypto company leverages sanction lists “maintained by the United States, United Kingdom, European Union, United Nations, Singapore, Canada, and Japan.” Additionally, Coinbase has sophisticated technology that can anticipate threats, Grewal disclosed.
“Coinbase maintains a sophisticated blockchain analytics program to identify high-risk behavior, investigate emerging threats, and develop new mitigations,” the company’s chief legal officer said. Currently, the exchange blocks thousands of blockchain addresses related to individuals or entities originating from Russia. Grewal’s post explains:
Today, Coinbase blocks over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own proactive investigations. Once we identified these addresses, we shared them with the government to further support sanctions enforcement.
The Coinbase executive ends the post by saying that the company is all about helping people protect and build wealth, but at the same time “safety, security and transparency” are important foundations. “Our commitment to comply with sanctions” is part of the process, the Coinbase blog post concludes.
