Coinbase Chief Legal Officer Unveils Crypto Exchanges Plan for Complying With Sanctions Against Russia

Coinbase chief legal officer Paul Grewal is outlining the cryptocurrency exchanges approach to sanctions in the wake of Russias invasion of Ukraine.

In a blog post, Grewal says the exchange giant intends to fully comply with the sanctions imposed on Russia following last months invasion.

According to Grewal, the cryptocurrency exchange takes proactive steps to detect attempts at evading sanctions and anticipating emerging threats on top of blocking sanctioned entities.

Grewal says that preventing sanctioned entities from using the crypto exchange partly occurs during the account registration phase.

“To open a Coinbase account, individuals and entities must provide identifying information, including their name and country of residence. We screen this information via an independent vendor before permitting an individual to transact. If a customer lives in a sanctioned country or region, or if they are identified as a sanctioned individual or entity, they cannot open an account on our platform.”

The Coinbase chief legal officer also says that geo-fencing controls are employed to prevent entities in sanctioned countries from accessing the crypto exchange. Newly sanctioned entities who had already signed up are singled out through the continuous screening process that Coinbase undertakes, according to Grewal.

“Coinbase regularly updates the global sanctions lists that we use for screening. If someone has opened a Coinbase account and is later sanctioned, we use this ongoing screening process to identify that account and terminate it.”

Coinbases top legal executive also says that the crypto exchange uses advanced blockchain analysis tools to build an internal blacklist of individuals or entities that may be engaging in criminal behavior. Grewal says that Coinbase shares such evidence of illicit activity with the authorities.

Allaying fears that Russia could use crypto assets to bypass sanctions, the Coinbase chief legal officer says that widespread sanctions evasion is unlikely to be successful with cryptocurrencies.

“The Russian government and other sanctioned actors would need virtually unobtainable amounts of digital assets to meaningfully counteract current sanctions. The Russian central bank alone holds over $630 billion in largely immobilized reserve assets. Thats larger than the total market capitalization of all but one digital asset, and 510x the total daily traded volume of all digital assets.”

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