A scrutiny of how major cryptocurrency exchanges respond to sanctions reveals a troubling patchwork. Reports suggest that Huobi and KuCoin, two of the world’s largest crypto platforms, did not block Russian banks from accessing their services even as Western sanctions intensified. The claims come from Policy, which cites a study from the analytics firm Inca Digital. The underlying finding is that Seychelles-based Huobi and KuCoin allowed traders to transact using debit cards issued by banks that are sanctioned by Western authorities. This means sanctioned financial institutions could still be used to fund trades on these platforms, even if the exchanges themselves refrain from accepting funds directly from those banks.
According to the article, neither exchange accepted money directly from blacklisted banks. Yet some users reportedly managed to operate accounts linked to sanctioned institutions, enabling a pathway to purchase digital assets despite the broader sanctions regime. This nuance highlights how enforcement can diverge between what is prohibited at the corporate policy level and what happens in day-to-day user activity on the ground. The situation raises questions about how sanctions are monitored and enforced in the fast moving world of digital finance, where the line between compliant behavior and circumvention can blur for individual users.
The report also notes activity on ByBit, a Singapore-based exchange. It claims that ByBit permits the conversion of Russian rubles into cryptocurrency. In practice, this would allow Russians to convert fiat money deposited via an online wallet or a bank card, including cards issued within Russia, into digital assets on the platform. Such flows illustrate the complexities of sanctions enforcement, especially as exchanges operate across multiple jurisdictions with varying regulatory standards and risk appetites. The ability to convert local currency into crypto can effectively provide a conduit for sanctioned individuals to access mining and trading markets without moving funds through traditional channels in a transparent way.
Earlier this year, Binance Crypto Exchange reportedly suspended bank transfers entirely, standardizing transfers in U.S. dollars. This move appears to reflect a broader shift in how major players manage risk in light of sanctions pressures, regulatory scrutiny, and evolving compliance expectations. While Binance took a stricter stance on certain fund movements, the broader landscape shows a mix of approaches. Some platforms tighten controls in line with Western sanctions frameworks, while others maintain more permissive postures, arguably for competitive differentiation or due diligence reasons. The divergence underscores the tension between maintaining broad market access for users and upholding strict compliance with international sanctions regimes.
Experts in compliance and financial security warn that the gaps between policy statements and practical execution can create vulnerabilities. Exchanges must balance the need to serve a global customer base with the mandate to lock out sanctioned actors. Analysts emphasize robust screening, real-time transaction monitoring, and transparent reporting as essential components of a resilient sanctions regime in crypto markets. The evolving regulatory environment requires ongoing vigilance from exchanges, regulators, and users alike. For observers, the central question remains: how can enforcement keep pace with the rapid evolution of crypto services while preserving legitimate access for compliant customers?
In the broader context, the sanctioning authorities have repeatedly called for tightening controls over digital asset platforms, stressing that crypto services should not be used to evade restrictions. The debates center on definitions of acceptable risk, the effectiveness of screening technologies, and the consequences for users who rely on crypto to participate in global markets. The current discourse suggests a future where tighter cooperation between regulators and exchanges becomes the norm rather than the exception. Until then, the public should remain aware that sanction policies, platform compliance measures, and user behavior can diverge in meaningful ways across different exchanges and jurisdictions. The ongoing coverage of exchange practices aims to shed light on these dynamics and help readers understand the risks and implications involved in cross-border crypto activity, especially for markets in Canada and the United States where regulatory clarity continues to evolve.