world’s largest cryptocurrency stock market BinanceCEO of Changpeng Zhao (CZ) shared a blog post.
cz “Russia, Ukraine, Sanctions and Crypto” He answered the questions asked in his post titled.
“First of all, I want to say how deeply sad, angry and offended I am watching the news from Ukraine. I never thought I would see such a terrible humanitarian crisis in the modern age. The Binance team is working hard to help people in and around Ukraine. We have already donated to help children, refugees and people in need.”
Talking about the sanctions later, the CEO said that there was a lot of misunderstanding and that Binance strictly adheres to international sanctions rules.
“Why doesn’t Binance go one step further and freeze the assets of all Russian users?
We do not think we are authorized to do so. Sanction decisions are taken at the state level within the framework of the law. We do not think it is right for businesses or platforms to decide to unilaterally freeze user assets.
There are regular Russian citizens in London or New York. Should a London bank CEO have the authority to decide to unilaterally freeze their assets? For what reason? Is it because they don’t agree with their country’s President? What if they can’t agree with another head of state in another country? Should they also have the power to freeze all assets of other country’s citizens? Where does this stop?
Second, is crypto really at the heart of this question?
Media and politicians right now crypto- and focuses on sanctions. The truth is, crypto is such a small space for Russia. If we look at crypto adoption today, probably around 3% of the global population has some form of crypto exposure (i.e., some crypto).
Most of them have only a small percentage of their net worth in crypto. On average less than 10%. So, crypto today probably has less than 0.3% of global net worth. This ratio is also valid for Russia. Now the media and politicians focus on 0.3% of the money instead of focusing on the banks that own 99.7% of the money. Even if you block all this, does it move the needle? No. It can be much more effective to focus on banks, oil/gas instead of focusing on Bitcoin.
Does Russia want to use crypto?
No. The Russian switch from ruble to crypto weakens the ruble, which in turn weakens Russia’s powers. The Central Bank of Russia is said to be actively trying to block access to crypto instead of promoting the use of crypto.
Another reason Russia doesn’t want to use crypto is because it’s too traceable.
Do they use privacy coins? No, they are even smaller. The largest privacy coin, Monero, has a market cap of $3 billion. Russia’s GDP is 1.5 trillion dollars.
After all, does the imposition of sanctions on several international crypto exchanges have any effect? No.
I hope this clarifies some of the misunderstandings or misunderstandings floating around.
sanctions
Returning to Binance, we take sanctions very seriously. Our compliance team has more than 500 employees worldwide, with close to half directly involved in enforcement control jobs such as anti-money laundering, name scanning, know your customer and chain tracking.
The teams and processes outlined above are working – literally – 24 hours a day to impose new sanctions on Russian individuals and organizations.
An astonishing statistic, we’ve looked closely at the entire list of sanctions and have found only one so far. Wait – only one? Yes, only one.
The reason this number is so low is because we use banking-grade tools like Refinitiv Worldcheck, which is the gold standard in money laundering, name scanning and sanctions control.
Persons Subjected to Sanctions (PEP) are stopped on Binance before boarding. Most newly sanctioned people would be marked as PEP and therefore denied access to our platform long before they could trade in the first place. This includes managers, lawyers, family members – people that people have tried and used to open fraudulent accounts.
Crypto Isn’t Ideal For Illegal Activity
All of this shows that – contrary to popular belief – crypto is not an effective tool for illegal activities.
First, KYC is tough. Second, you can’t move millions of dollars into crypto without people noticing, and third, you can be tracked.
Check out the Bitfinex hack. In theory you can steal $3.6 billion worth of Bitcoin, but then you can’t use them without getting caught.
To summarize
We meet the enforcement requirements and crypto is not useful for avoiding sanctions.
We will not unilaterally freeze the accounts of millions of innocent users.”