Major cryptocurrency exchanges have failed to prevent sanctioned Russian banks and merchants from transacting, according to a blockchain forensics report. At least two established coin trading platforms continue to allow Russians to use their bank cards in peer-to-peer deals, analysis shows. It also highlights increased Russian interest in Tether.
Russian traders continue to use major cryptocurrency exchanges to circumvent restrictions
Some of the world’s largest digital asset exchanges have failed with measures to prevent Russian banking institutions under sanctions from operating through their platforms, reveals a report by blockchain analytics firm Inca Digital, announced on the first anniversary of Moscow’s invasion of neighboring Ukraine.
According to the research, cited by Bloomberg and Politico, merchants can still use debit cards issued by US-sanctioned Russian banks, peer-to-peer platforms (PTPs) from two Seychelles-based exchanges, Huobi and Kucoin.
Inca CEO Adam Zarazinski explained that while neither accepts funds from blacklisted banks, allowing cryptocurrency buyers to trade with each other using accounts with sanctioned institutions is a “direct violation of the American and European sanctions with a small loophole”. The exchanges have yet to comment on the findings.
Binance Offers Russians Ways To Convert Rubles Into Crypto, Inca Says
The research examined data from 163 crypto trading platforms, centralized and decentralized exchanges, as well as P2P and OTC (over the counter) service providers. Almost half of them allow Russian citizens to buy digital currencies, applying different know-your-customer (KYC) requirements, trading limits, and geolocation tools. For example, Singapore-based Bybit allows users to convert rubles into cryptocurrency on its P2P platform and make fiat deposits, including via “any Russian-issued card.”
Binance, the industry leader in terms of daily trading volume, has also been mentioned, and the report identifies potential vulnerabilities. The authors note that the exchange offers “multiple methods for Russians to convert local currency into crypto,” including through its OTC and P2P marketplace, available to them without KYC checks for up to $10,000.
Chagri Poyraz, global head of sanctions at Binance, stated that the exchange is a “full KYC platform and was the first major exchange to implement EU crypto-related sanctions… Our P2P team takes the extra extraordinary step of filtering any form of communication between users to ensure that there is absolutely no potential nexus with Russian entities through any type of workaround,” he emphasized.
The study also points to the use of tether to circumvent Western sanctions on Russia, noting an increase in discussions on Russian social media about the use of the stablecoin for remittances. “Russians frequently use Tether to get money out of the country,” said the CEO of Inca Digital. Both Binance and Tether have faced regulatory scrutiny in recent months.
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