KuCoin And Huobi Allegedly Assisted Russian Banks In Defying Sanctions
Two of the world’s largest cryptocurrency exchanges – Huobi and KuCoin – have been accused of enabling Russian banks to break sanctions.
According to reports, the two exchanges with headquarters in Seychelles failed to take adequate precautions to prevent traders from utilizing debit cards issued by Sberbank and other sanctioned banks on their platforms. Inca Digital CEO, Adam Zarazinski, declared in an interview that the crypto exchanges’ action is a breach of United States and European sanctions.
“Russians widely use Tether to transport money out of the country,” Zarazinski said. “There is no doubt that these two exchanges utilize it to supply crypto-banking services to sanctioned Russian banks.”
KuCoin Denies Involvement With Russian Banks
Meanwhile, KuCoin administrators denied the allegations of involvement with Russian banks. Its CEO Johnny Lyu stated that the company does not facilitate the deposit or withdrawal of funds using cards from these institutions.
Meanwhile, Justin Sun, an advisor to Huobi, hasn’t issued any statement regarding the allegation. However, the report also mentioned that Binance, the world’s largest cryptocurrency exchange, provides multiple options for Russians to convert their local currency into cryptos, such as an over-the-counter trading desk and a peer-to-peer marketplace.
Binance also refuted the accusations and asserted that it implements KYC regulations. Moreover, it “adds the extra measure of filtering any interaction between users to ensure that there is no means of connecting with Russian organizations through anyway.”
A Contradiction
According to the report, Singapore-based exchange ByBit enables Russians to transform their rubles into crypto through its peer-to-peer market and fiat deposit. Consequently, Russians can buy crypto on the exchange after depositing fiat money from an online digital wallet or a Russian-issued bank card.
However, this contradicts the official statement from various exchanges that they have restricted their activities in Russia because of the sanctions, claiming to block users from Russia and stop them from creating new accounts. Friday marked the first year since Russia initiated a full-scale assault on Ukraine, displacing millions of Ukrainians from their homes.
It is noteworthy that several policymakers and government representatives had already cautioned against the potential of Russia circumventing sanctions by employing digital currencies. In particular, US Senator Elizabeth Warren, a prominent Democrat, even presented a bill in Congress to impede Russian crypto dealings.
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