Coinbase (NASDAQ:COIN) has published a blog post on how it uses technology to adhere to sanctions compliance. The post follows the many economic sanctions that have been applied to Russia, and Belarus, following the unprovoked invasion of Ukraine.
Coinbase notes that it has blocked over 25,000 addresses related to Russian individuals or entities they believe to be engaging in illicit activity. Identified addresses are also shared with the US government to support sanctions enforcement.
Coinbase also states that “ordinary fiat currency laundered through traditional financial institutions remains one of the most common mechanisms for sanctions evasion.” Meanwhile, digital asset transactions are highly “traceable, permanent, and public” and thus less likely to be utilized to evade the law.
Coinbase follows the following steps to comply with the sanctions applied to Russia, its elites and other targeted nations.
- Block access to sanctioned actors. During onboarding, Coinbase checks account applications against lists of sanctioned individuals or entities, including those maintained by the United States and many other countries.
- Detect attempts at evasion. Coinbase states that it regularly updates its sanctions lists used for screening. If someone has opened a Coinbase account and is later sanctioned, the ongoing screening process should identify that account and terminate it.
- Anticipate threats. Coinbase maintains a sophisticated blockchain analytics program to identify high-risk behavior, study emerging threats, and develop new mitigations.
Coinbase states that blockchain is a transparent technology that is a “formidable tool” for enforcement actions.
As was reported earlier, it is expected that the White House will announce this week an Executive Order specifically targeting crypto and its potential use for the avoidance of sanctions along with other regulatory and policy concerns.
