Cryptocurrency evangelists are on the defensive amid warnings from U.S. and European lawmakers that digital asset companies are not up to the task of complying with Western sanctions imposed on Russia following the country’s invasion of Ukraine.
"It's an opportunity for the industry to show that it is mature and that it knows how to properly manage risk," said Matt Homer, an executive in residence at venture capital firm Nyca Partners. U.S. Senator Elizabeth Warren has alleged that many crypto exchanges and wallets have lax compliance controls and are not collecting data on customers' identities.
On Monday, Coinbase issued a lengthy blog detailing its controls, noting that it had blocked more than 25,000 addresses connected with Russian individuals or entities believed to be engaging in illegal activity. But as the value of all cryptocurrencies surged past $3 trillion last year and more Americans invest in the asset class, the industry has been trying to shed its unsavory image by burnishing its overall compliance credentials.