Cryptocurrency exchanges with ties to Russia are increasingly enabling the circumvention of international sanctions, providing a pathway for Russian entities to conduct cross-border transactions outside traditional banking systems. This activity raises concerns about the effectiveness of sanctions designed to limit Russia’s access to the global financial system and fund its war in Ukraine.
The ability to convert rubles into cryptoassets, transfer them across borders, and then convert them back into local currency through overseas brokers and exchanges allows Russian individuals and businesses to bypass restrictions imposed by governments worldwide. Despite growing regulatory scrutiny, several exchanges – some with limited formal registration – continue to process significant volumes of crypto transactions linked to sanctioned entities, according to recent analyses.
The use of cryptocurrency for sanctions evasion isn’t new, but the scale and sophistication of the networks involved are drawing increased attention from regulators. These services exploit the decentralized and often opaque nature of the crypto market to obscure the origin and destination of funds, making it difficult to track and intercept illicit financial flows.
Exchanges Facilitating Ruble-to-Crypto Transactions
Several cryptoasset exchanges have been identified as key facilitators of this sanctions evasion. Bitpapa, a peer-to-peer (P2P) exchange registered in the UAE but primarily targeting Russian users, was sanctioned by the U.S. Office of Foreign Assets Control (OFAC) in March 2024 for its role in supporting Russian sanctions evasion. According to Elliptic, approximately 9.7% of Bitpapa’s outgoing crypto funds are destined for OFAC-sanctioned targets, including 5% specifically to the sanctioned exchange Garantex.
Blockchain analysis indicates that Bitpapa employs tactics to evade sanctions enforcement, such as constantly rotating its wallet addresses. This practice aims to prevent transaction monitoring systems from identifying the exchange as a counterparty and obscuring the Russian origin of the funds.
ABCeX, operating from an office in Moscow’s Federation Tower – previously occupied by Garantex – facilitates both order-book and P2P ruble-to-cryptoasset trading. The exchange utilizes wallet obfuscation strategies to conceal transactions. ABCeX has reportedly processed at least $11 billion in cryptoassets, with substantial amounts flowing to Garantex and Aifory Pro.
Operational Obfuscation and Shared Infrastructure
Exmo (Exmo.com and Exmo.me) presents a case of purported geographic separation contradicted by on-chain data. Following the 2022 invasion of Ukraine, Exmo claimed to have exited the Russian market by selling its regional business to Exmo.me. Still, analysis reveals that Exmo.com and Exmo.me continue to share the same custodial wallet infrastructure. As reported by TRM Labs, cryptoassets deposited into either platform are pooled into identical hot wallet addresses, and withdrawals are issued from the same addresses, indicating a lack of genuine operational separation. Exmo has conducted over $19.5 million in direct transactions with sanctioned entities, including Garantex, Grinex, and Chatex.
Rapira, a Georgia-incorporated exchange with a Moscow office, has engaged in direct cryptoasset transactions with the sanctioned exchange Grinex totaling more than $72 million. Reports indicate that Rapira’s Moscow offices were raided in connection with an investigation into suspected capital flight to Dubai.
Expanding Services and International Reach
Aifory Pro specializes in cash-to-cryptoasset services in Moscow, Dubai, and Türkiye, and operates as a “Foreign Economic Activity Payment Agent” for international trade, particularly between Russia and China. The service explicitly facilitates bypassing restrictions by offering virtual payment cards and Apple Pay-enabled cards utilizing a customer’s USDT balance to pay for foreign services like Airbnb and ChatGPT, which are otherwise blocked in Russia. JD Supra reports that Aifory Pro also has financial links to Abantether, an Iranian exchange, to which it has sent nearly $2 million in cryptoassets.
These exchanges, and others like them, demonstrate a concerted effort to exploit the vulnerabilities of the crypto ecosystem to circumvent sanctions and maintain access to the global financial system. The ongoing investigation and potential sanctions against these entities will likely shape the future of crypto regulation and its role in international finance.
The regulatory landscape surrounding cryptoassets and sanctions evasion is rapidly evolving. Further enforcement actions and increased international cooperation are expected as authorities seek to disrupt these networks and limit Russia’s ability to utilize cryptocurrency for illicit purposes. Readers are encouraged to share their thoughts and experiences in the comments below.
