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Yellow tape emblazoned with the inscription “sanctions” around a map of the Russian Federation, decorated in the colors of the same country’s flag.Yellow tape emblazoned with the inscription “sanctions” around a map of the Russian Federation, decorated in the colors of the same country’s flag.

Russian crypto holders have reportedly used simple workarounds to evade sanctions – and trade on overseas crypto exchanges.

In the wake of the war in Ukraine, Western leaders have imposed sanctions on most leading Russian banks.

Account holders at these banks, thus, are effectively blocked from using fiat on/off ramps at major international crypto exchanges.

Platforms automatically block transactions that make mention of the Russian banks on United States government-curated sanctions lists.

But, Kommersant reported, many exchanges only check self-reported transaction declarations from senders.

As such, the media outlet wrote:

“Russians have been able to bypass restrictions. Instead of Sberbank, for example, they write ‘green bank;’ instead of Alfa-Bank, they write ‘red’ or ‘A-Bank.’ And instead of ‘Tinkoff,’ they write ‘yellow.’”

As a result, the media outlet noted, “about half of all [Russian] transactions” over the past six months “were carried out via firms included on the US Treasury’s sanctions list.”

The interior of the headquarters of Russia’s Tinkoff Bank.The interior of the headquarters of Russia’s Tinkoff Bank.
The headquarters of Russia’s Tinkoff Bank. (Source: Sergey Ivlev/YouTube/Screenshot)

Russians Evading Sanctions – Will Crypto Exchanges Respond?

Experts claimed that international exchanges would likely close this loophole.

They said that platforms know failure to do so would likely result in repercussions from American regulators.

The media outlet noted that crypto exchanges now have tools that let them detect if transactions originate from Russian banks.

Even if crypto exchanges and their partners close this loophole, a former Binance Russia/CIS executive claimed, crypto-trading Russians will likely continue to bypass sanctions using other means.

The expert stated that while the “majority” of Russian token traders “use sanctioned banks,” there are now “more platforms [that let Russians] conduct transactions.”

The expert said the fast-growing Russian P2P market was an increasingly viable alternative to big-name crypto exchanges.

This month, the head of the financial regulator Rosfinmonitoring claimed the number of crypto transactions conducted in Russia has risen by three times in 2023.

The regulatory chief added that transfer volumes had also “doubled” in the same period.

Earlier this week, Russian MPs said Moscow had developed a tool that lets crypto miners evade Western-led sanctions.

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