Major crypto exchanges allow sanctioned Russian banks to carry out transactions: Report

Two major crypto exchanges still allow customers from sanctioned Russian banks to trade on their platforms, according to a report by data analytics firm Inca Digital.

Huobi and KuCoin enable people to trade crypto using debit cards issued by sanctioned Russian banks such as Sberbank, the report found. Inca Digital CEO Adam Zarazinski said in an interview that this could be a violation of US and European sanctions, and that the transactions often involve Tether, a stablecoin that has faced its own scrutiny from regulators.

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“Tether is often used by Russians to move money out of the country,” he said. “It is certainly used by these two exchanges specifically to provide crypto banking services to sanctioned Russian banks.”

Huobi adviser Justin Sun did not immediately return requests for comment regarding the report. Representatives for KuCoin and Tether also did not immediately respond to separate requests for comment.

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Binance, the world’s largest cryptocurrency exchange, is also prominently mentioned in the report. The exchange offers “multiple methods for Russians to convert local currency to crypto,” including via its over-the-counter trading desk and a peer-to-peer marketplace, the report said. Each of these options is open to Russians without know-your-customer checks for up to $10,000, the report said.

Binance, which has been the subject of worldwide number probes, did not immediately respond to a request for comment. In the US, Binance has been investigated by the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Department of Justice and the Internal Revenue Service.

Zarazinski said the company plans to release the report publicly soon, noting that it is the one-year anniversary of the Russian invasion of Ukraine. The report included other troubling observations about the 62 crypto exchanges it analyzed, including that some of them do not require Russians to pass KYC checks.

“We want crypto to not only survive everything that has happened recently, but thrive,” he said. “But we also want to fend off bad actors and grow the industry responsibly.”