Dapper Lab’s NFT Wallet Restricts Russian Users Following EU Sanctions

Dapper Labs, the Web3 startup behind NBA Top Shot, has imposed an almost complete ban on Russian users in an effort to stay in line with new sanctions against the country.

“It is now prohibited to offer crypto-asset wallet, account or custody services of any value to accounts with connections to Russia, regardless of the amount on the wallet,” Dapper Labs said in a statement last week.

The Vancouver-based blockchain company said the move was the result of a directive from its payment processing partner, which is subject to EU regulations.

On October 6, the European Union confirmed a comprehensive ban on providing crypto services to Russia as part of its eighth round of sanctions against the country for its aggression in Ukraine.

The Dapper wallet is a digital asset custodian wallet on Dapper Labs’ Flow blockchain, originally launched in 2020 as a gaming-focused network, but now supporting a variety of NFT-centric projects.

The wallet supports NFT offerings NBA Top Shot, Allday, UFC Strike, CryptoKittes, suggesting they will all be affected by the ban.

Under new measures, the bloc tightened a previous rule that limited crypto payments to and from Russian accounts up to 10,000 euros ($9,727). The threshold has now been removed, banning all crypto-active wallets, accounts or custody services.

Dapper Lab’s NFTs still “belong” to Russians – they just can’t move them

Despite Dapper Labs stating that it could no longer provide custody services to Russia-based users, the firm says that those affected can still view and access their NFTs via the wallet, as they have only suspended accounts – not deleted them.

Dapper Labs says this means any NFT previously purchased by an affected Russian user still belongs to them.

Blockworks has reached out to Dapper Labs to confirm whether the Flow blockchain itself will actively censor Russia-based users and will update this piece when we hear back.

“Every Moment you own and every Dapper Balance continues to be your property,” the company said in its blog post, referring to the blockchain-based collections held by users.

But they cannot buy, sell or give any NFTs, even using their existing account balance.

The EU believes its encryption is justified as the previous EUR 10,000 cap was not effective. Its sanctions “impose a direct cost on Russia for its war of aggression and damage Russia’s industrial and economic ability to wage war, produce more weapons, and repair existing weapons systems.”

Although Western powers have enacted several rounds of sanctions since Russia invaded Ukraine in February 2022, Moscow has not hinted at a possible diplomatic solution.

On Monday, massive explosions rocked Ukraine’s capital Kyiv and other cities in apparent revenge attacks.

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