Ukraine Asks Crypto Exchanges To Freeze Russian Traders’ Crypto Assets

Ukraine’s Vice Prime Minister and Minister of Digital Transformation, Mykhailo Fedorov, has urged cryptocurrency exchanges to block addresses of Russia-based customers.

“It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users,” Fedorov said in a Sunday tweet.

There has been bloodshed and tears in Ukraine ever since Russian leader Vladimir Putin launched a full-scale military strike on the Eastern European country. The international community has slapped Russia with a wave of sanctions in response to the unjustifiable assault.

For instance, the assets of Russia’s central bank along with those of President Putin, and Foreign Minister Sergey Lavrov have been frozen. In addition, the US, UK, and European Union have cut Russia from the international financial intermediary SWIFT — a move that basically prevents Russia from sending and receiving transactions to and from its allies such as Belarus.

Nonetheless, there are still concerns that the Russian government as well as the loathsome oligarchs could turn to crypto so as to circumvent the crippling sanctions imposed on the country in the wake of the invasion of Ukraine. Observers say cryptocurrencies can be used as a workaround for the sanctions because they enable borderless payments.

As of now, no major crypto exchange has elected to freeze accounts belonging to Russian users. However, Ukraine-based digital assets marketplace DMarket has “cut all relationships with Russia and Belarus due to the invasion of Ukraine.” Ergo, DMarket will be freezing all the accounts of previously registered users and donating the proceeds to the war effort.

Meanwhile, the Ukrainian government is accepting cryptocurrency donations to fund its fight against Putin’s army. According to ZyCrypto estimations, Ukraine has received over $30 million in various cryptocurrencies since the launch of the donation campaigns.

Bitcoin Struggles For Momentum Amid The Russia-Ukraine Hostilities

Bitcoin has been trading sideways in recent months, with the latest Ukraine and Russia hostilities only worsening its prospects.

Bitcoin nosedived last week following Russia’s invasion of Ukraine, leading the crypto market freefall that saw more than $200 billion in value wiped out, a loss of over 11% within a 24-hour period. The market drop boded badly for its safe-haven status as investors are offloading their holdings due to the chaos caused by Russia’s invasion of Ukraine.

The crypto market correction was mirrored in mainstream financial markets, with the American S&P 500 and the Nasdaq falling by over 2% on the heels of the geopolitical developments.

BTC is presently changing hands at $41,207. The global crypto market cap stands at around $1.8 trillion — approximately 40% down from the $3 trillion posted in November.

It remains to be seen whether BTC and the broader crypto market will highten further as peace talks between Ukraine and Russia start in Belarus.