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Feb 27, 2022 - Technology

Ukrainian digital marketplace cuts off Russian customers

Stephen Totilo
An image of the Ukrainian flag against an overcast sky.

Photo: STR/NurPhoto via Getty Images

A Ukrainian startup that sells NFTs and virtual items for games such as Counter-Strike: Global Offensive will block Russian and Belarusian customers as part of its response to Russia’s invasion.

Why it matters: As companies around the world shift policies in response to Russia's invasion, the Ukrainian-owned DMarket has been figuring out how to help its home country.

  • Prior to the invasion, CEO Vlad Panchenko focused on safety, flying most of DMarket’s employees and their families out of the country.
  • Since fighting began, he’s shifted to fundraising, urging visitors to DMarket’s front page to donate to Ukraine’s defense. (Other Ukrainian game companies have made similar appeals.)
  • On Saturday, Panchenko announced DMarket would sever connections to Russia and Belarus, whose government has assisted the Moscow-driven invasion.

The details: DMarket, which says it has 300,000 monthly users who spend about $6 million in digital transactions a month, is blocking new user registration from Russia and Belarus.

  • It has also frozen the assets of users from those countries and will prohibit transactions involving Russian currency, a company spokesperson said.
  • Panchenko told Axios that the ban will have a financial hit on the company, as he estimated 30% of DMarket’s customer base is from Russia and Belarus.
  • The sweep of the ban does not mean he believes all users from those nations are complicit in the war, he said. But he won’t do business with countries that “are killing my friends on the street,” he said in a phone interview.

Between the lines: In a call, Panchenko described the stresses and priorities of a Ukrainian company owner in war time.

  • He stressed about people he knew back in Ukraine and spoke of efforts to help evacuate more people who were unable to fight.
  • He also noted that, while most DMarket employees had left Ukraine, about 10 had decided to stay and fight in the citizen militia that has emerged to stop the Russian forces.
  • “Somebody has to do one thing, somebody has to do another thing,” he said. “And I will do my best.”

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