25,000 crypto wallets linked to Russia blocked by Coinbase as financial fallout deepens

Company says that the accounts were being used for ‘illicit activity’

Cryptocurrency trading platform Coinbase says it has blocked more than 25,000 digital wallets it says are linked to “Russian entities or individuals”.

The company says it took action against accounts that it believes “to be engaging in illicit activity, many of which we have identified through our own proactive investigations”.

“We shared them with the government to further support sanctions enforcement,” said the company’s chief legal officer Paul Grewal in a blog post.

The blocked wallets make up around 0.2 per cent of Coinbase’s 11.4 million monthly transacting users.

Coinbase says that the move was not linked to Russia’s invasion of Ukraine and that the company has not seen a surge in illicit activity following the start of the conflict.

Last week Coinbase CEO Brian Armstrong said that “ordinary Russians are using crypto as a lifeline” after the ruble plummeted in value after sanctions were placed on the country.

He insisted that shutting down Coinbase’s operations in Russia would just hurt people in the country.

“We are not preemptively banning all Russians from using Coinbase,” Mr Armstrong tweeted. “We believe everyone deserves access to basic financial services unless the law says otherwise.”

After sanctions were placed on Russia, the Biden administration asked exchanges to ensure that Russian individuals and organisations were not using crypto to avoid the sanctions, according to Bloomberg News.