There has been a lot of controversy over how cryptocurrency might be used for the wrong reasons by people who want to fund or commit crimes. The other topic of concern among people is that, since cryptocurrency is decentralized, sanctioned people and governments can decide to use cryptocurrency as an alternative to the normal banking system and currency. This problem has been blown out of proportion in the last few weeks since the beginning of the war between Ukraine and Russia.
For people reading about this for the first time, Russia attacked Ukraine on February 24th, 2022 for their own needs. But since the world was anticipating this attack, other countries donated weapons and protective and medical supplies to Ukraine to help defend themselves against Russia. The western countries could not be involved directly in the fight against Russia as members of NATO, so the best weapon they could use to force Russia into submission and stop the war was to enforce sanctions against Russia. Some of the sanctions had on the Russian economy included that most foreign businesses and corporations with businesses in Russia closed shop in the country. Other governments would not buy products from Russia, which crippled the country’s economy and devalued the Russian currency, which is the Russian currency.
One of the smart moves Russian citizens made was to turn their savings into cryptocurrency to save themselves from suffering huge losses as the value of their economy was on its knees. As a result, many people, organizations, and governments want cryptocurrency wallet platforms and applications to ban Russian users from their platforms and ensure everybody in or from Russia suffers the effects of the sanctions imposed on them. Some of the leading platforms for cryptocurrency investment and wallets, including Binance and Coin Base, are the most attacked platforms. People, governments, and other financially related organizations want the platforms to freeze all Russian users from their platforms.
Due to this pressure from all parties involved, Binance CEO Changpeng Zhao had to speak up on the issue during an interview with CNN. During the interview, he explained why it would be impossible for the platforms to freeze Russian accounts on their platforms.
According to Mr. Zhao, most platforms have procedures and guidelines to freeze individuals’ assets as long as they are not sanctioned or known criminals. He also said that Binance and himself were against the war happening in Ukraine, but he could not sanction the entire Russian population for the crimes of a few people. He said that he was against the war, but not the people. All the individuals involved in the war or other crimes would be frozen from the platform, but he was not going to punish the entire Russian population.
The other piece of information CEO Zhao offered to the CNN reporter was that people perceive cryptocurrency as an immoral currency for criminals, but according to statistics, cryptocurrency has a lower probability of being involved in illegal practices. 5% of normal centralized currencies around the world are used for illegal activities, while only 0.15% of cryptocurrency is used for illegal practices. He also disclosed that although cryptocurrency is decentralized, the tokens are very traceable, as seen by hackers who stole billions in 2016 and held the money in cryptocurrency, but as soon as they used the money, they were traced and arrested.