brian armstrong coinbase
Coinbase CEO Brian Armstrong.Steven Ferdman/Getty Images
  • Coinbase boss Brian Armstrong said some Russians are using cryptocurrencies as a lifeline after the ruble crashed.
  • The crypto exchange won't pre-emptively ban all Russians from accessing its platform, he tweeted Friday.
  • But the CEO doesn't think there's a high risk of oligarchs using it to sidestep sanctions.

Coinbase CEO Brian Armstrong believes some Russians are using cryptocurrencies as a way to keep going after their home currency the ruble crashed.

At the same time, the crypto exchange's boss said late Thursday that he doesn't see much of a risk that Russian oligarchs are using digital assets to get around Western sanctions.

"Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too," he said in a series of tweets.

Armstrong said Coinbase would not pre-emptively block all Russians from accessing its platform. But if US authorities decide to impose a ban, it will comply, as it is a regulated financial services business and must do so, he added.

"We believe everyone deserves access to basic financial services unless the law says otherwise," he said.

The Russian ruble plunged 30%, after the US and its allies introduced sanctions at the weekend against Russia over its invasion of Ukraine.

But trading involving the ruble and cryptocurrencies has not increased since Russia attacked, according to Chainalysis figures. In fact, volume actually fell from $70.7 million Thursday last week to $34.1 million this Thursday, the data showed.

And Armstrong played down the idea that wealthy Russians are using crypto to get around sanctions — a concern raised by US lawmakers in a letter to the Treasury Department this week.

"That being said, we don't think there's a high risk of Russian oligarchs using crypto to avoid sanctions," he said. 

"Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets."

Publicly viewable blockchains allow anyone to track the movement of cryptocurrencies such as bitcoin and ethereum. Any significant transactions would be caught, making it more traceable than assets like cash or gold.

Armstrong said Coinbase would keep working with the authorities and take any further steps required around sanctions.

Large crypto exchange Binance is blocking access to Russian account holders targeted by international sanctions, but it also will not keep all Russians from accessing its platform, CEO Changpeng Zhao said Wednesday.

Read more: A tectonic shift is underway for crypto as it takes 'a seat at national security discussions'. 2 major players explain how bitcoin is laying down the foundations for a multi-decade bull run that will vindicate early investors.

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