In addition to the huge amount of cryptocurrency donations in this Russia-Ukraine conflict (accounting for more than half of the total donations), the crypto's involvement in the sanctions has also sparked widespread concern. With the announcing of the launch of US sanctions against Russia, crypto giants have now been forced to take a stand. Unlike voluntary and active donations, participation in sanctions goes against the DNA of the crypto industry and is therefore mostly forced.

First, there are the centralized exchanges. U.S. Treasury officials have explicitly asked Binance, FTX and Coinbase to block the accounts of those subject to sanctions. According to Reuters, French Finance Minister Bruno le Maire said on Wednesday that the EU is seeking to ensure that Russia does not use cryptocurrencies to circumvent EU-imposed sanctions. The EU currently freezes Russian central bank assets as well as disconnects seven Russian banks from the SWIFT financial information system.

CZ said that despite media reports that exchanges will not sanction ordinary Russians and that exchanges will not follow the rules of sanctions; in fact at least Binance will comply with the rules of sanctions. Previously Binance told Bloomberg that it has formed a dedicated global compliance working group that includes world-renowned sanctions experts and is taking the necessary actions to fully comply with any sanctions while minimizing the impact on users. coinbase said in a statement that it will not impose any blanket bans on transactions involving Russian addresses, but will block those that may accounts or transactions involving sanctioned individuals or entities.

Ukraine's Ministry of Digital Transformation sent official letters to eight cryptocurrency exchanges asking them to stop providing services to Russian users over concerns that the digital currency is being used to evade sanctions: Coinbase, Binance, Huobi, KuCoin, Bybit, Gate, Whitebit and Ukrainian exchange Kuna.

Jesse Powell, Co-founder & CEO of Kraken, the second largest compliant exchange in the US, said he understands Ukraine's demand to ban all Russian users' accounts, but we cannot freeze our Russian customers' accounts until we are legally required to do so. But Russians should be aware that such a request may be imminent. Powell, who has a reputation for being outspoken, also said that if we were to voluntarily freeze the financial accounts of residents of countries around the world that unjustly attack and provoke violence, the first step would be to freeze all U.S. accounts. But in reality, that's not really a viable business option for us.

After centralized exchanges, the DeFi world is not immune, especially for entities that are not currently in full decentralized or DAO form and still have companies. In particular, companies whose entities are based in the United States need to be the first to strictly comply. The largest decentralized wallet MetaMask (Little Fox) and ConsenSys, the parent company of Infura, even had an oops incident.

According to Decrypt, Infura is blocking access to all IP addresses in two regions, Crimea and the U.S. East, in order to comply with the new U.S. sanctions program, but a configuration error led to the blocking of Venezuela (now lifted). Other regions currently blocked include Iran, North Korea, Cuba and Syria.

Earlier, José Rafael Peña, identified as a former CoinDesk employee, said that Venezuela's IPs were blocked in Metamask using Infura because they were "not available in certain areas to comply with the law", but could continue to be used after changing nodes. MetaMask subsequently responded that Infura had a misconfiguration this morning, but it has now been corrected. metamask relies on Infura as the default endpoint, but users can change this setting as needed or in the event of any service outages. We apologize for the disruption to people in the inadvertently affected areas.

OpenSea also says that while we apologize to affected artists and creators, OpenSea must adhere to strict policies regarding sanctions laws. We are a U.S. company and comply with U.S. sanctions laws, which means we must prevent people on the U.S. sanctions list from using OpenSea.

In fact, there has been a long history of regulation of DeFi, which has also raised questions about whether it is truly decentralized. Earlier Uniswap came under regulatory pressure to take down stock passes from its front-end interface. A Financial Forty Forum article, which is closely associated with Chinese policymakers, also points out that there is a group of stakeholders on the DeFi platform who are responsible for making and implementing decisions and exercising management or ownership functions, and that these stakeholders and the governance agreements they rely on are a natural entry point for regulation.

Can you not comply if you are not a U.S. company? If not, the power of subsequent U.S. sanctions against companies in the crypto industry can be terrifying.

According to CoinDesk, hours after the U.S. announced sanctions against Russian exchange Chatex in November 2021, claiming that the cryptocurrency exchange "facilitated trade in multiple ransomware variants," all U.S. and European companies Chatex had been relying on stopped working with it and cut off any communication. it and cut off any communication. The list includes BitGo, which immediately froze Chatex's BTC, XRP and other wallets; blockchain analytics provider Crystal Blockchain, which Chatex used for compliance; London-based KYC provider Sum and Substance; web services company CloudFlare; and even Google. Bulochnikov said the Chatex team was unable to access their corporate email accounts and cloud services. The day after the sanctions, Chatex was no longer able to operate, firing almost all of its employees.

Against this backdrop, however, the true decentralized value of Bitcoin has once again come to the fore, and has triggered a recent price increase of more than 8% in seven days, and even 18% in a single day, the largest single-day record in percentage terms in more than a year.

Nigel Kusher, CEO of W Legal, told the BBC that for certain Russian oligarchs and billionaires under international sanctions, the immediate problem they face is where to move their cash, and they certainly don't want to move it to Russia, and buying bitcoin is the only option, "There's not a single bank in the world other than a Russian bank bank will touch you, so where else can you put your money?"

But Caroline Malcolm, head of international policy at blockchain analytics firm Chainalysis, also says that cryptocurrencies don't offer Russia a panacea for escaping sanctions: like the traditional financial system, the cryptocurrency ecosystem can take steps to identify transactions from identified sanctioned entities. chainalysis has even recently found hacking from coin-mixing tools A recent Chainalysis report found that Russian individuals and groups account for a "disproportionate share" of crypto-related crimes.

Industry sources point out that although the crypto has a decentralized DNA, it has been closely integrated with Wall Street and regulators in the U.S. since 2020, especially after the total ban in China and full compliance in the U.S. Currently, most of the capital, companies and core personnel in the crypto industry are also located in the U.S. Therefore, it stands out more in this US sanctions against Russia. In addition to the increased prominence of Bitcoin's value, this will also trigger the industry to reflect on whether the U.S. has caused the crypto to become too centralized and how to establish a more robust and sturdy decentralization mechanism.

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