In the backdrop of economic sanctions imposed on Russia in response to its invasion of Ukraine, blockchain data and analysis platform Chainalysis has announced two new free-of-charge tools for crypto users including companies and individuals to validate that they are not interacting with crypto wallets associated with sanctioned entities. The first tool called Chainalysis oracle is essentially a smart contract that will be regularly updated to allow users to check if a wallet is on sanctions list from the US, European Union, or United Nations before connecting with it. The smart contract is available for anyone to use and does not require a customer relationship with Chainalysis.
The company said crypto users can call the Chainalysis oracle, which is live now, from another smart contract to check if an address is on a sanctions list. “As with the traditional financial system, some sanctioned Russian actors may attempt to use cryptocurrency as a means to evade sanctions. All of these transactions would be permanently recorded on the blockchain, providing opportunities to identify and shut down sanctions evasion tactics,” Chainalysis said in a statement earlier this week.
“Now is the time for the industry to demonstrate that blockchains’ inherent transparency make cryptocurrency a powerful deterrent to sanctions evasion,” said Michael Gronager, Co-Founder and CEO, Chainalysis. “In anticipation of ongoing sanctions, we’ve prioritized the development of these tools so that all cryptocurrency market participants have what they need to harness this transparency and conduct basic sanctions screening at no cost to them.”
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The second solution announced is an API designed for web/mobile UIs and web servers wherein users would receive an API key through which they can check if the address is on the sanctions list or not. Chainalysis expect the solution to be available in April.
In line with sanctions imposed on Russia, the US crypto exchange Coinbase on Monday in a company blog post said it has blocked over 25,000 addresses related to Russian individuals or entities believed to be engaging in illicit activity. In another development, Reuters had reported on Tuesday that another US-based exchange CoinZoom is pausing new crypto accounts within Russia.
Last month, Ukraine’s Minister of Digital Transformation Mykhailo Fedorov in a tweet had requested Twitter users to provide “any information about crypto-wallets of Russian and Belarusian politicians and their surroundings.” “War crimes must be pursued and punished,” he tweeted amid reported possibilities of Russian politicians turning to cryptocurrencies to avoid sanctions.