Russia May Rely on Domestic Crypto Exchanges to Evade Sanctions, Chainalysis Warns

Blockchain analytics firm Chainalysis has raised concerns about the potential use of domestic crypto exchanges by the Russian government to evade international sanctions. In a recent report, the firm highlighted two crypto platforms, Garantex and Exved, as potential resources for Russia to facilitate cross-border trade despite ongoing financial restrictions.

According to Chainalysis, Garantex has processed nearly $100 billion in transactions since 2018, providing significant liquidity across major blockchains. While the report does not definitively link this volume to state-sponsored sanctions evasion, the analysts caution that the platform’s capabilities could be exploited for such purposes.

Exved, another local crypto exchange, was also identified as a potential tool for sanctions evasion. The report noted its close ties with InDeFi Bank, co-founded by Garantex founder Sergey Mendeleev and former KGB officer Alexander Lebedev. Exved has reportedly been involved in facilitating imports and exports, even before recent changes in Russia’s cryptocurrency regulations.

While the extent of the Russian government’s involvement remains uncertain, Chainalysis warns that this could signal a significant shift in how economically isolated nations utilize digital assets to maintain global financial connections.

This warning comes in the wake of new legislation signed by President Vladimir Putin, which redefines digital currency mining and introduces new regulations for the crypto industry in Russia. The law allows the trading of foreign digital assets on Russian blockchain platforms and gives the Bank of Russia authority to block assets that might threaten financial stability.

Meanwhile, recent reports indicate that the Russian government plans to launch two new cryptocurrency exchanges focused on stablecoin development, one in St. Petersburg and another in Moscow. These exchanges are expected to operate under a pilot program within an experimental legal regime, initially serving a limited user base before potentially expanding to include major exporters, importers, and affiliated businesses.

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