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Blockchain.com closes crypto custody for Russians amid EU sanctions

3 min read
Blockchain.com closes crypto custody for Russians amid EU sanctions

Crypto wallet provider Blockchain.com is the latest company to soon cease to provide services to Russian nationals due to the latest sanctions by the European Union.

Blockchain.com has notified its users that it’s going to shut down accounts of Russian nationals in two weeks, the local news agency RBC reported on Oct. 14.

According to the report, Blockchain.com will allow Russian users to withdraw their funds until Oct. 27, 2022. After that date, the accounts of Russian nationals are reportedly going to be blocked.

The statement emphasized that Blockchain.com is currently prohibited from providing custodial and reward services to Russian citizens in line with the EU’s eighth package of sanctions against Russia.

Unlike previous sanctions, which only limited Russan-EU crypto payments to around $9,700, or 10,000 euros, the latest package puts a blanket ban on cross-border crypto payments between Russians and the EU. The new sanctions were imposed on Oct. 6.

Blockchain.com’s services are not limited to custodial services. Blockchain.com also runs a noncustodial wallet, which ideally is designed to allow users to fully control their assets while the company has no access to the wallet’s data. In addition to the noncustodial wallet, Blockchain.com also runs custodial trading accounts, which allow users to buy and sell crypto on the platform.

It remains unclear whether Russian customers would be able to retain access to their noncustodial wallets on Blockchain.com. The firm did not immediately respond to Cointelegraph’s request for comment.

Blockchain.com is not the only platform to halt some services to Russians amid the latest sanctions. Major blockchain developer Dapper Labs also suspended Russian accounts due to the EU’s latest sanctions against Russia and its nationals.

Many other major exchanges and peer-to-peer platforms, including Crypto.com, Coinbase and LocalBitcoins, are reportedly planning to comply with the sanctions as well.

Starting Oct. 7, P2P exchange LocalBitcoins stopped offering Russian users its services, including both trading as well as wallet services, chief marketing officer Jukka Blomberg told Cointelegraph. “As a result of the 8th EU-wide sanction package, we unfortunately have to restrict the Russian customers’ activity completely on LocalBitcoins platform,” he said.

Blomberg noted that the Russian trade volume was about 8% of the firm’s total volumes in September 2022. Russia was once the largest LocalBitcoin’s market, accounting for 19% of total all BTC trading volumes on the exchange on monthly basis in 2020.

Related: Russian officials approve use of crypto for cross-border payments

Binance, one of the world’s largest crypto exchanges, is no exception. The firm is working around the clock to apply the new restrictions for Russians as well. “Changes like these take time to implement as we have to carefully coordinate with multiple tech and risk management partners,” a spokesperson for Binance told Cointelegraph.

Some exchanges, including Tether’s sister firm Bitfinex, previously opposed crypto sanctions against regular Russian people. “Our view is that the actions of a government do not necessarily represent the wishes of individuals,” Bitfinex chief technology officer Paolo Ardoino said in March 2022. He added that Bitfinex was willing to protect the accounts of all their customers “unless otherwise directed by the regulatory authorities” by which they are governed.