- ‘It’s a sanctioned country,’ company co-founder said
- Many other crypto businesses resist call to isolate Russia
Animoca Brands Corp. Ltd, one of the biggest and most visible blockchain gaming companies, is cutting its service to Russian customers in response to the invasion of Ukraine.
The company’s move makes it a standout among major crypto-related businesses, which have largely continued to serve Russian users even as sanctions mount and other industries pull back on investments there.
Animoca co-founder Yat Siu said in an interview that the decision will affect subsidiaries such as Gamee and Lympo, though he said the number of Russian users isn’t large enough to have a material impact on the company’s results.
“The legal advice we’ve been receiving is we now have to impose some restrictions,” Siu said. “It’s a sanctioned country on par with North Korea. The moment we end up doing business in those areas, we might ourselves become financially excluded from the financial system.”
The move is part of a widening retreat from Russia amid broad international condemnation of President Vladimir Putin’s decision to wage war in Ukraine. The U.S. Treasury Department has imposed economic measures targeting Russia’s largest financial institutions and banking assets, while the European Union excluded certain Russian banks from the SWIFT messaging system, among other things.
Despite calls by Ukraine Vice Prime Minister Mykhailo Fedorov for cryptocurrency exchanges to block addresses of Russian users, major crypto exchanges have resisted such an action, seeing it as contrary to the libertarian ethos of an industry that caters to those seeking to shelter assets beyond government reach.
But the Hong Kong-based Animoca will stop selling shares to Russian investors, Siu said, in addition to blocking Russian users. Gamee already announced on Twitter on Feb. 24 that it’s closing its services to Russia while Lympo said it would stop publishing Russian athlete NFTs and halt negotiations with the nation’s athletes to join the Lympo NFT Ecosystem.
Animoca’s products use intellectual property from popular global brands like Formula 1 and Walt Disney Co. It has also invested in more than 150 companies, including Axie Infinity maker Sky Mavis, game-maker Dapper Labs and nonfungible marketplace OpenSea, though Siu said it will be up to those companies to decide their approach to Russia.
Animoca doesn’t break out its users by geography. For the period of January to September, Animoca reported bookings of about $140 million. Other income, which included gains on investments and digital assets, reached $529.6 million.