2 of the world’s largest crypto exchanges have reportedly allowed sanctioned Russians to trade
According to an investigation by blockchain analytics firm Inca Digital, popular crypto exchanges Huobi and KuCoin have been criticized for not complying with sanctions against Russia as a result of the invasion of Ukraine.
Inca Digital revealed that the top two exchanges did not take steps to prevent sanctioned Russian banks from using their respective peer-to-peer networks, Politico reported.
Inca Digital CEO Adam Zarazinski stated during an interview that these transactions often use Tether, a stablecoin that has come under its own request from regulators, and that this could be a violation of US and European restrictions.
Major crypto exchanges fail to block sanctioned Russian banks
Russian bank debit cards were said to have been exploited on crypto exchanges.
Huobi and KuCoin Enable People to Trade Crypto Using Debit Cards Issued by Sanctioned Russian Banks, Report Found
— Bloomberg (@business) 25 February 2023
Zarazinski was quoted by Bloomberg as saying:
“Tether is often used by Russians to move money out of the country, adding that it is certainly used by these two exchanges specifically to provide crypto banking services to sanctioned Russian banks.
He added:
“We want crypto to not only survive everything that’s happened recently, but thrive… but we also want to fend off bad actors and grow the industry responsibly.”
Huobi and KuCoin did not immediately respond to requests for comment.
One year after Russia’s full-scale invasion of Ukraine, the news shows that US efforts to ban Russian institutions and oligarchs from the global financial system remain ineffective.
Image: Crypto News
Binance denies policy error
Hundreds of thousands of troops on both sides have been killed and millions of Ukrainian women and children have been forced to flee their homes as a result of the ongoing war.
The report also notes policy flaws with Binance, as the company allegedly offers Russian users “various ways” to buy cryptocurrencies on the exchange.
This problem persists despite Binance restricting fiat deposits from certain Russian payment cards last March.
Binance has denied the allegations. The exchange claimed that it strictly enforces the know-your-customer (KYC) law and that it censors communications between users in order to impose fines.
The report also revealed that the Singapore-based exchange ByBit enables users to convert Russian rubles into cryptocurrencies via the peer-to-peer market and fiat deposits.
Crypto total market cap at $1 trillion on the weekend chart | Chart: TradingView.com
What is KYC?
The Know Your Customer (KYC) rule requires businesses to verify the identity of their customers to stop illegal activities, including money laundering and terrorist financing.
Before providing monetary services, businesses, including digital currency exchanges, must collect and verify personal information from their customers, including name, address, date of birth and government-issued identification. This rule is used in a number of sectors to limit fraudulent and illegal behaviour.
– Featured image from TRT World
