Animoca Brands Cuts Off Services to Users in Russia Following Sanctions Over Ukraine Invasion

Deviating from the stance of its peers, Animoca Brands is one of the few blockchain-based companies to have imposed sanctions on Russia.
Image source: Animoca Brands

Quick take:

  • Animoca Brands will no longer give users in Russia access to its services.
  • Access to the company’s shares will also be restricted for Russians.
  • Animoca Brands is one of the few companies in the crypto industry to impose sanctions on Russia.

Hong Kong-based blockchain game software and venture capital firm Animoca Brands has decided to cut off its services to users in Russia following a series of sanctions imposed by companies in the West due to Russia’s invasion of Ukraine.

According to Bloomberg, Animoca will block Russian users from the company’s services and restrict access to its shares. 

In a Bloomberg interview, Animoca co-founder Yat Siu said that the sanctions would likely apply to the company’s subsidiaries such as Gamee and blockchain fitness company Lympo, although the impact won’t be substantial due to the low number of users from Russia.

However, Yat Siu did not clarify if Animoca will block Russian users from purchasing SAND, the native utility token of the company’s subsidiary, The Sandbox.

“The legal advice we’ve been receiving is we now have to impose some restrictions,” said Siu. “It’s a sanctioned country on par with North Korea. The moment we end up doing business in those areas, we might ourselves become financially excluded from the financial system.”

Deviating from the position of many of its peers in the blockchain industry, Animoca Brands is one of the few companies in the crypto industry – along with Ukrainian-born digital assets company DMarket – to impose sanctions on Russia.

“Ukrainian-born startup DMarket cuts all relationships with Russia and Belarus due to the invasion of Ukraine. The registration on the platform is prohibited for users from Russia and Belarus; accounts of previously registered users from these areas are frozen,” the company tweeted.

On Sunday, Ukraine’s vice prime minister Mykhailo Fedorov called on major cryptocurrency exchanges to block the wallet addresses of Russian users. On Tuesday, Ukraine’s Ministry of Digital Transformation sent letters to eight cryptocurrency exchanges asking them to stop servicing Russian users due to concerns that crypto can be used to evade sanctions.

The letters are sent to Coinbase, Binance, Huobi, KuCoin, Bybit, Gate.io, Whitebit, and Ukrainian exchange Kuna.

Kuna has turned off all ruble pairs and closed the deposit and withdrawal of ruble but users from Russia can still withdraw cryptocurrency to third-party addresses. Whitebit has suspended registration of new users from Russia.

Binance told CNBC that it’s “not going to unilaterally freeze millions of innocent users’ accounts” although it said it would block the accounts of individuals on the sanctions list.  

Coinbase is also blocking accounts and transactions of Russian users targeted by sanctions, but won’t be banning all users from Russia.

Kraken said it “cannot freeze the accounts of our Russian clients without a legal requirement to do so.”

Ukraine’s ministries have also urged cryptocurrency exchanges to suspend services to users from Russia’s ally, Belarus. 

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