Crime and National Security

How Russians Use Tether to Evade Global Sanctions

On February 24, 2022 Russia invaded Ukraine. Since that day, rumors, reports, and debates have proliferated on how cryptocurrency, and in particular Tether, can be used by Russia to evade global sanctions. Below is an initial report on how cryptocurrency trading platforms and Tether are used by Russians.

Inca Digital’s investigations team utilized our data analytics tools and global intelligence assets to collect data on 163 cryptocurrency trading platforms globally - this includes centralized exchanges, decentralized exchanges and peer-to-peer (P2P) market places, and over the counter service providers (OTC). Of those 163 trading platforms we collected data on, 79 allow Russian nationals to purchase cryptocurrency, all with different KYC requirements, maximum trading limits, and use of technology to identify the location of their users. We focused our research on what financial services these platforms provided to Russian citizens over the past year and how Tether, specifically, is being used.

Key findings

  • Huobi and Kucoin both allow for transactions with Russian banks via their P2P platform that are sanctioned by the US, Canada, UK, EU and others. To establish jurisdiction, Inca Digital has data that both Huobi and Kucoin have US and Canadian users.

  • On February 26, 2022, two days after the start of the war, there was a spike in the max spread between the Russian Ruble and Tether. The spread grew wider over the following months.

  • In the first few days of the war Inca Digital observed a surge in discussions about using Tether for remittances on Russian social media. 62 (out of 79) international crypto trading platforms Inca Digital analyzed provide financial services to Russians.

  • 11 of 62 international crypto trading platforms Inca Digital analyzed do not require Russians to pass KYC checks to start trading.

  • Many cryptocurrency trading venues do not use VPN checks, meaning Russians can easily circumvent IP address attribution.

  • 38 of 62 international crypto trading platforms Inca Digital analyzed have no Tether trading limits for Russian users.

  • Kucoin, Binance, Bybit, and Huobi are the top exchanges that were co-mentioned with Tether on Russian social media from the start of the war through November 2022.

More information

Find detailed information on our presentation and on the coverage from Politico and Bloomberg.

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