According to research by blockchain analytics company Inca Digital, popular crypto exchanges Huobi and KuCoin have been criticized for not complying with sanctions imposed on Russia as a result of the invasion of Ukraine.
Inca Digital said that the two top exchanges did not take steps to prevent approved Russian banks from using the peer-to-peer network, Politico reported.
Inca Digital CEO Adam Zarazinski stated in an interview that these transactions often use Tether, a stablecoin that has itself come under scrutiny from regulators, and that this may violate US and European bans.
Major Crypto Exchange Fails to Block Attacked Russian Banks
Russian bank debit cards are said to have been exploited in crypto exchanges.
Huobi and KuCoin allow people to trade crypto using debit cards issued by sanctioned Russian banks, reports found https://t.co/snl3X4as3O
– Bloomberg (@business) February 25, 2023
Zarazinski said in quotes by Bloomberg:
“Tether is often used by Russians to move money out of the country, adding that it is indeed used by both exchanges mainly to provide crypto banking services to sanctioned Russian banks.
He added:
“We want crypto not only to survive all the recent events, but to thrive…
Huobi and KuCoin did not immediately respond to requests for comment.
A year after Russia’s full-scale invasion of Ukraine, the news shows that the United States’ efforts to ban Russian institutions and oligarchs from the global financial system continue to be ineffective.
Image: Crypto News
Binance Denies Policy Flaws
Hundreds of thousands of soldiers on both sides have been killed and millions of Ukrainian women and children have been forced to flee their homes because of the ongoing war.
The report also noted policy flaws with Binance, as the company allegedly offered Russian users “various ways” to buy cryptocurrencies on the exchange.
This problem persists despite the fact that in March last year, Binance restricted fiat deposits from certain Russian payment cards.
Binance has denied these claims. The exchange insists it strictly enforces know-your-customer (KYC) laws and censors communications between users in order to impose fines.
The report also revealed that the Singapore-based ByBit exchange allows users to convert Russian rubles into cryptocurrencies through a peer-to-peer marketplace and fiat deposits.
Crypto total market cap at $1 trillion on the weekend chart | Chart: TradingView.com
What is KYC?
Know Your Customer (KYC) rules require businesses to confirm their customers’ identities in order to stop illegal activities including money laundering and terrorism financing.
Before offering monetary services, businesses, including digital currency exchanges, must collect and verify personal information from customers, including name, address, date of birth, and government-issued identification. This rule is used in several sectors to prevent fraudulent and illegal behavior.
-Images shown are from TRT World