Web3 Protocol WalletConnect Halts Services in Russia, Following US Treasury Guidelines
Web3 platform WalletConnect, which links cryptocurrency wallets, has restricted its services in Russia, in light of the latest US Guidelines.
The US Treasury’s Office of Foreign Assets Control (OFAC) unveiled sanctions in Russia and a few parts of Ukraine. The restrictions came into effect on Oct. 30.
Dear WalletConnect community,
In light of the latest legal and OFAC guidance, WalletConnect has restricted the availability of the WalletConnect Protocol in Russia. Certain regions of Ukraine were temporarily impacted; service has since resumed.
We sincerely apologize for any… pic.twitter.com/tg5FicCh4g
— WalletConnect (@WalletConnect) October 31, 2023
“In light of the latest legal and OFAC guidance, WalletConnect has restricted the availability of the WalletConnect Protocol in Russia,” the company said in a post on X (Twitter).
In a note to users, WalletConnect CEO Pedro Gomes clarified that the company did not block services in other countries.
“There were some incorrect reports that we blocked other non-sanctioned countries. We can confirm that no other countries were blocked.”
WalletConnet also announced that it also temporarily restricted Ukraine IP addresses. “Until we could compliantly switch back on areas of Ukraine that are not impacted by sanctions,” it added.
WalletConnect is an open-source Web3 standard, that bridges the gap between blockchain wallets and decentralized applications (dapps).
As the crypto industry grapples with global regulatory ambiguity, platforms such as WalletConnect will face challenging decisions. However, the platform’s recent withdrawal from US-sanctioned nations emphasizes the importance of adhering to international guidelines.
US Sanctions on Digital Asset Businesses
The OFAC released a new brochure with crypto-specific guidance on navigating U.S. sanctions in October 2021. The agency expects crypto operators to shoulder the same responsibility for avoiding sanctions violations akin to other financial institutions.
The guideline read, “As a general matter, U.S. persons, including members of the virtual currency industry, are responsible for ensuring they do not engage in unauthorized transactions or dealings with sanctioned persons or jurisdictions.”
Amid geopolitical tensions in Russia and the Middle East, US sanctions have cracked down on crypto gateways to these jurisdictions. For instance, crypto asset service providers like Coinbase and Binance have blocked the wallets of Russian individuals under U.S. sanctions.