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Tuesday, 07 February 2023
The CEO of a cryptocurrency exchange rejects proposals for a ban on all Russian transactions.

The CEO of a cryptocurrency exchange rejects proposals for a ban on all Russian transactions.

2022-10-31

Binance founder Changpeng Zhao claims that exchanges would abide by particular restrictions, but rejects a blanket prohibition. Cryptocurrency exchanges should not ban transactions by Russian customers, according to the creator of one of the major trading platforms, amid fears that digital currencies would be used to circumvent sanctions.

Changpeng Zhao, Binance’s CEO, and founder stated that the business was “not in a position to penalize, like, communities of individuals.”

“In Russia, there are a few hundred people on the international sanctions list, largely politicians, and we absolutely adhere to that,” Zhao told BBC Radio 4’s Today program.

“We distinguish between Russian politicians who launch wars and ordinary Russians; many ordinary Russians do not.” “We are not political, we are opposed to war, but we are here to aid the people,” he continued.

Cryptocurrency exchanges – which enable the trade of digital currencies such as bitcoin and Ethereum – have been under pressure from the West to comply with sanctions by blocking transactions with Russia, amid fears that crypto could allow the Kremlin to circumvent restrictions designed to cut it off from the international banking system.

The United Kingdom, the European Union, the United States, and Canada took steps over the weekend to exclude Russian banks from Swift, the key global payments messaging system used by banks, as well as to block Russia’s central bank from accessing its foreign currency reserves. Some believe that the Russian government and banks may try to utilize cryptocurrency as a backdoor, as an alternative to the dollar as a unit of international trade.

Zhao, who goes by the moniker “CZ,” claimed he didn’t know how many of the platform’s accounts had been suspended due to ties to Russia but stressed that Binance knew who its clients are and would not allow sanctioned persons to use its services.

Ukraine’s deputy prime minister has urged cryptocurrency exchanges to blacklist all Russian customers’ addresses, a request that has so far been ignored by the top exchanges, including Binance and Nasdaq-listed Coinbase. “We are not debating the appropriate degree of punishment. Zhao stated, “We don’t construct penalty lists.”

“Globally, there are tens of thousands of swaps.” Many of them are rather little, and many of them are not particularly safe. Many of them aren’t as obedient. We have no influence over the industry. Guess what? I can post my sanction list, and you may publish yours. It won’t be followed by anybody else. It just redirects Russian users to lesser networks.”

Zhao stated that cryptocurrencies, which are stored on a decentralized ledger, will not allow anyone to avoid sanctions. “There are always many strategies for people to circumvent penalties.” Sanctions can be avoided by utilizing US dollars, cash, diamonds, or gold. There’s nothing exceptional about crypto there, in my opinion.”

Zhao, whose personal fortune is estimated to be $1.9 billion (£1 billion) by Forbes magazine’s list of billionaires, said that Binance has contributed $10 million to aid the humanitarian effort in Ukraine and assist people fleeing the crisis.

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