According to a research by blockchain analytics firm Inca Digital, popular crypto exchanges Huobi and KuCoin have been criticized for not adhering with sanctions placed on Russia as a result of its invasion of Ukraine.
Inca Digital revealed that the two top exchanges did not take measures to prevent sanctioned Russian banks from using their respective peer-to-peer networks, the Politico reported.
Inca Digital CEO Adam Zarazinski stated during an interview that these transactions frequently use Tether, a stablecoin that has come under its own inquiry from regulators, and that this may be a breach 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, a report found https://t.co/snl3X4as3O
— Bloomberg (@business) February 25, 2023
Zarazinski said in quotes by Bloomberg:
“Tether is frequently used by Russians to move money out of the country, adding that it is absolutely used by these two exchanges in particular to provide crypto banking services to sanctioned Russian banks.
“We want crypto to not just survive all the stuff 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 demonstrates 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 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 means” to purchase cryptocurrencies on its exchange.
This issue persists despite the fact that in March of last year, Binance restricted fiat deposits from certain Russian payment cards.
Binance has refuted the claims. The exchange asserted that it strictly enforces know-your-customer (KYC) laws and that it censors communication between users in order to implement fines.
The report also disclosed that the Singapore-based exchange ByBit enables users to convert Russian rubles into cryptocurrencies via its 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 mandates that businesses confirm the identities of their customers in order to stop illegal activities including money laundering and terrorism funding.
Before offering 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 curb fraudulent and unlawful behavior.
-Featured image from TRT World