Flow blockchain developer Dapper Labs has suspended Russian accounts after the European Union imposed new sanctions against Russia and its citizens.
Announced on October 6, the latest set of EU sanctions against Russia places a complete ban on the provision of crypto-asset wallets, accounts, and custody services, regardless of the total value of the assets.
Following the announcement of the penalty, Dapper stated that accounts with links to Russia will no longer be able to sell, buy, or gift non-fungible tokens (NFTs), withdraw funds from their accounts, or add to their balances, stating:
“It is now forbidden to provide crypto-asset wallet services, account or custody of any value to accounts with connections to Russia, regardless of wallet size.”
The company explained that because its “partner in payment processing and stored value service is subject to EU regulations,” Dapper has been directed to impose restrictions on these accounts under EU law.
“However, Dapper has not closed accounts. Users affected by these actions can continue to access and view NFTs. Additionally, regardless of this new regulation, any NFT previously purchased by an affected user still belongs to that user.” the company said.
The sanctions against Russia include a complete ban on cross-border crypto payments between Russia and the EU, which also leads to a ban on “all crypto-asset wallets, accounts or custodial services, regardless of wallet amount.”
With Dapper following orders to block access to Russians, it marks yet another occasion in which a cryptocurrency-related company has had to succumb to regulatory pressure to avoid compliance issues, much like the Tornado Cash crypto mixer disaster from August.
On Twitter, user XBT002 criticized Dapper for the move, which they argued works against the idea of censorship resistance for blockchain technology:
“If you are freezing ‘accounts,’ you are actively censoring an industry that was built around resistance to censorship.”
In response, EIDumboTS, claiming to be a Dapper employee, confirmed that the company was “instructed” to take this action on the Russian accounts and thus had its hands tied in the situation.
Dapper is a central company based in Vancouver, Canada with a valuation of $7.6 billion. Alongside the Flow blockchain, Dapper has launched a host of popular NFT projects including NBA Top Shot, NFL All Day, and Crypto Kitties.