Crypto one of the few sources of money left to Russians, and Binance stands by it
As a consequence of Russia’s invasion of Ukraine, Russians have suddenly found money a scarce resource. Just a few days ago the nation was locked out of the SWIFT system of international banking. Then Visa and Mastercard announced that they would stop handling payments within Russia. To many Russians, crypto and existing cash assets may be their only source of transferable funds into the foreseeable future.
Indeed, the ease in which private companies have been able to shut people off from their own sources of money will likely cause a global flight towards crypto, especially since crypto exchanges seem committed to protecting a person’s right to their money. In an interview with BBC Radio 4 (and reported on The Guardian) CEO and founder of Binance, Changpeng Zhao, acknowledged that private companies have no moral grounds for denying innocent people access to their own assets.
Zhao did acknowledge that the company would comply with the sanctions against specifically named people (mostly politicians), but regular Russian citizens would be able to continue to access their crypto assets.
“We differentiate between the Russian politicians who start wars and the normal people, many normal Russians do not agree with war,” he said in the interview.
“We are not political, we are against war, but we are here to help the people.”
There is pressure on crypto exchanges to lock Russia out, as there is the concern that, with no other way of accessing money, Russians will turn to crypto as a “backdoor,” and alternative method of international exchange (one presumes so they can buy food and pay rent).
Zhao also mentioned in the interview that the decentralised nature of crypto meant that even if Binance were to participate in the nation-wide sanctions, other crypto exchanges (including some hosted in Russia and/or run by Russians) would not. Many of these don’t hold themselves to the same standards of legitimate players like Binance, and could result in a wave of fraud further draining the finances of Russians.
Finally, even were all crypto exchanges to block out Russia, Zhao also pointed out that there would still be ways around it for the people with the resources and networks – the ones that sanctions typically target – around it, while the innocent would continue to struggle from a lack of access to assets.
“If people want to evade sanctions, there’s always multiple methods,” Zhao said. “You can avoid sanctions using US dollars, using cash, using diamonds, using gold. I don’t think crypto is anything special there.”