Jesse Powell Suggests Ukraine Could Freeze Russian Crypto Activity

Reading Time: 2 minutes

• Kraken CEO Jesse Powell has responded to calls to freeze Russian crypto users’ accounts
• Ukraine’s Vice President made the demand on Twitter last week
• Powell said that without a court order this was not possible, but any country could issue such an order

Kraken founder and CEO Jesse Powell has hinted that the Ukraine government could force cryptocurrency exchanges to halt activity of Russian users in response to a request from Ukraine’s Vice Prime Minister Mykhailo Fedorov. Fedorov tweeted yesterday that he would like crypto exchanges to “block addresses of Russian users”, including those based in Belarus, to which Powell responded by saying that a court order was necessary to enact such a policy, but that such an order could come from any country, including Ukraine.

Powell Warns That Crypto Cannot be Seized Without Court Order

Fedorov’s request caused a stir in the cryptocurrency community, particularly his request to “sabotage ordinary users” alongside Russian and Belarusian politicians:

I’m asking all major crypto exchanges to block addresses of Russian users.

It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.

— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022

The response was telling, with many sympathising with Fedorov but informing him that his demands fly in the face of the cryptocurrency ideology:

Powell, who has courted controversy already on this topic recently by urging Canadians to take their crypto off exchanges lest it be seized by Canadian authorities, also informed Fedorov that this was simply not an option without a legal demand:

1/6 I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.

Russians should be aware that such a requirement could be imminent. #NYKNYC https://t.co/bMRrJzgF8N

— Jesse Powell (@jespow) February 28, 2022

Powell said in his tweet thread that while it was not up to exchange operators to say who should and shouldn’t be allowed to use the platform, international courts did have banning powers. He added that any recognized government court issuing a court order to freeze crypto accounts of certain users would have to be adhered to, hinting that Ukraine themselves could issue an edict and, as long as the reasoning had a sound legal base, it would be followed. He even said that the U.S. could use the legal manoeuvre, if it had significant purpose, although he had another separate message for the U.S.:

6/6 Besides, if we were going to voluntarily freeze financial accounts of residents of countries unjustly attacking and provoking violence around the world, step 1 would be to freeze all US accounts. As a practical matter, that’s not really a viable business option for us.
/🧵

— Jesse Powell (@jespow) February 28, 2022

Point made.