In a sharp deviation from its traditional neutrality, Switzerland has joined the EU and the U.S. in imposing financial sanctions against Russians following Putin’s brutal invasion of Ukraine.
In addition to enforcing financial measures that include banning transactions with the Russian Central Bank, adopting the EU’s SWIFT measures, and blocking a number of exports to Russia, the typically neutral country — which is worth noting has been under increasing pressure to get in-line with the EU and US sanctions against Moscow — has now taken a strong stance against Russian citizens holding cryptocurrency within its borders.
Ever since Russia’s invasion of Ukraine, NATO and the EU have taken severe measures designed to accelerate restrictions on Kremlin-linked oligarchs as a way of preventing them from accessing financial services and even their own cash.
However, with federal agencies alleging that cryptocurrencies can be used to bypass international sanctions, many people are urging the world’s biggest crypto exchanges to block the addresses of Russian users and even freeze their assets.
These requests seems to have split the crypto community in half, with Binance saying it’s not “going to unilaterally freeze millions of innocent users’ accounts.” Kraken’s CEO Jesse Powell, was on the same page, stating on twitter:
1/6 I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.
— Jesse Powell (@jespow) February 28, 2022
On the other hand, five South Korean exchanges including Upbit and Bithumb started restricting Russian IP addresses.
Switzerland has taken a similar approach, according to a Financial Times report. Aside from joining the international community in imposing all sanctions against Russia, Switzerland is also going after Russians holding cryptocurrency within its borders and plans to freeze those assets.
Interestingly, a senior official also highlighted some of the biggest benefits that digital assets offer.
“If someone holds their crypto key themselves, then, wherever they are, it’s going to be virtually impossible to identify them. But, if they are using crypto services – funds, exchanges, and so on – these service points we can target.”