Huobi and KuCoin did not respond to requests for comment.
A year after Russia launched its full-scale invasion of Ukraine, a conflict that has since killed hundreds of thousands of soldiers on both sides and forced millions of Ukrainians from their homes, the news reveals the continuing limits of Washington's attempts to cordon off Russian institutions. and oligarchs from the broader financial system.
"Despite false claims by crypto lobbyists, this is further proof that crypto is the currency of choice for illicit finance, including by Russians seeking to evade sanctions," said Senator Elizabeth Warren (D-Massachusetts) in a statement.
Policy makers like Warren have warned for the better part of a year that crypto markets represent a major vulnerability in US sanctions on Russia. While Treasury officials say they have seen little evidence that digital assets can be used to circumvent large-scale sanctions, the US is trying to turn off the spigot.
Inca, whose market surveillance tools have been used by the Commodity Futures Trading Commission and the Defense Advanced Research Projects Agency, prepared the report on the anniversary of the Russian invasion to highlight how certain exchanges still allow The Russians move their assets in and out of the country using peer-to-peer platforms despite mounting sanctions. The report identifies potential vulnerabilities in two other major exchanges, notably Binance, the world's largest cryptocurrency trading platform and a frequent target of regulators around the world.
Binance offers โmultiple methodsโ for Russians to convert local currencies into crypto, including through its exchange and a peer-to-peer marketplace, according to the report. While the platform does not allow users to use Russian credit cards, debit cards or sanctioned bank accounts on its exchange, those deposits can be accessed through its peer-to-peer marketplace, according to the report.
Binance called the report's allegations "categorically false" in a statement.
โBinance is full KYC [know your customer] and was the first major exchange to implement EU crypto-related sanctions,โ Binance global head of sanctions Chagri Poyraz said. He said the company "takes the extra extraordinary step of filtering any form of communication between users to ensure there is absolutely no potential nexus to Russian entities through any type of solution."
The exchange has engaged in a major lobbying and public relations push in recent weeks in an attempt to stave off the continued push by state and federal agencies to rein in lightly regulated crypto businesses.
Binance has previously said that it would like to resolve any allegations that may be brought by the Department of Justice or civil regulators. Patrick Hillmann, the exchange's director of strategy, has acknowledged that Binance was unable to fully verify the identity of its customers โbasic requirement for any financial companyโ during its first two years of operation. Binance said has no timeline to reach an agreement with the regulators.
Meanwhile, Singapore-based exchange ByBit allows users to convert Russian rubles into crypto using its peer-to-peer marketplace and fiat deposits, according to the report. Russians can also buy cryptocurrency on the exchange after depositing fiat currency via an online digital wallet or local bank card, including "any card issued in Russia."
โMany of these exchanges officially curtailed their operations in Russia due to imposed sanctions. They claimed to block users from Russia and prevent them from opening new accounts,โ the report states. Instead, they continued to work with Russian citizens, even allowing them to use maximum deposit, trading and withdrawal limits, according to the report.
BitBy did not respond to a request for comment.
