HomeCryptoBinance freezes cryptocurrency accounts of a Russian arms manufacturer

Binance freezes cryptocurrency accounts of a Russian arms manufacturer

The exchange Binance has decided to freeze the cryptocurrency wallet of a Russian user, specifically an arms manufacturer, Vladislav Lobaev.

The Security Service of Ukraine (SSU) has, in fact, stated that Binance:

“blocked a cryptographic wallet belonging to a Russian citizen who is sponsoring the Russian war in Ukraine.”

The CoinDesk newspaper was able to discover that the wallet in question belonged to Lobaev, one of the founders of Lobaev Arms, a private company that produces sniper rifles and military ammunition.

Cryptocurrencies in wartime

Since the outbreak of war at Europe’s eastern gateway, digital currencies have risen to prominence for being a fast, secure, and anonymous means of sending funds, whether they were used by Ukrainians or Russians, and regardless of purpose.

Vitalik Buterin, Mark Zuckerberg, Elon Musk, and others have been featured in conspicuous donations, just as companies have helped, for example, PayPal or Binance itself. 

On his own Telegram channel, the Russian entrepreneur invited donations of Bitcoin (BTC), Ether (ETH), and Tether (USDT) to support Lobov Arms. The funds were intended to purchase equipment for troops in the separatist Donetsk and Luhansk People’s Republics, which have received armed support from Moscow since 2014.

Due in part to the power given by the Ukrainian president to law enforcement agencies, Binance decided to block the account, which had more than 800,000 Ukrainian hryvnias in its belly, equivalent to about $21,700 in digital currencies. In addition, Lobaev was also using the Russian fiat payment service Yoomoney and an account at the Russian financial institution Sberbank, while on the Tron blockchain he received just over $840 in the stablecoin pegged to the U.S. dollar.

According to Lobaev’s son, a certain Evgeny, who provided a screenshot to prove his words, the account was actually blocked because of an audit and not because of the cause to which the sums collected were directed.

Binance specified:

“Any government or law enforcement agency around the world can make legitimate requests regarding users in their jurisdiction provided they are accompanied by the appropriate legal authority. However, Binance also protects its users and reserves the right to refuse requests. of law enforcement agencies that do not stand up to legal scrutiny, where no legal purpose is served or there are flaws in the investigative approach. We apply the same level of scrutiny to requests as any leading bank, financial institution or multinational would.”

Cryptocurrencies are among the major tools used in current wars

Binance and the Russian case

The exchange previously blocked the use of Russian cards this spring following international sanctions against Russia and the exit of MasterCard (MA) and Visa (V) from the country.

Vladislav Lobaev, a well-known Russian arms manufacturer since 2003, along with his brother Nikolay, produces weapons and supports the Kremlin’s military campaigns, not least the current one. 

On his Telegram channel, which serves as a cash box for donations and communiqués to followers, he has named himself Lobaev Z because Z is the letter Moscow troops put on tanks and is one of the country’s new symbols during this war.

Crystal Blockchain, the well-known analysis company, believes that all cryptographic addresses published by Lobaev for fundraising belong to Binance, which is therefore used as the main channel.

ChainAnalysis said 54 militant groups and pro-Russian volunteers have raised more than $2.2 million in cryptocurrency through social media channels.

On Tuesday, the NPU, or Ukrainian National Police, shut down a network of “call centers” targeting Ukrainian and EU citizens who were victims of scams. The same had already happened in September 2021, when the SSU eliminated a call center in Lviv.

The crackdown by Ukrainian authorities, however, would not have been possible if, on March 16, 2022, President Volodymyr Zelensky had not signed the law on digital assets that supports their use on Ukrainian territory, but also certifies their control by the authorities.

George Michael Belardinelli
George Michael Belardinelli
A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality