Despite international efforts to clamp down on Russia’s no-KYC (Know Your Customer) crypto exchanges, new platforms continue to emerge, replacing those shut down.
A report by blockchain analytics firm Chainalysis highlights that while overall inflows to these platforms have declined, new Russian-language exchanges are surfacing to facilitate crypto transactions outside of traditional financial oversight.
Source: Chainanalysis
With over $1.5 billion worth of transactions recorded in 2024 alone, these platforms operate without formal registration, making it difficult for regulators to pinpoint their jurisdiction.
The crackdown, led by US authorities and international financial watchdogs, has led to some disruptions but has not eradicated the industry.
Instead, Russian users are shifting to alternative methods, reinforcing the resilience of the no-KYC market.
New exchanges emerge as regulatory gaps persist
The rise of unregistered exchanges in Russia signals persistent regulatory loopholes.
Chainalysis found that over 100 such platforms were operating in 2024, serving a user base that prefers anonymous transactions.
These platforms work closely with sanctioned Russian banks, enabling them to bypass restrictions imposed by international financial institutions.
In early February, Russia’s telecom regulator, Roskomnadzor, blocked BestChange, a major over-the-counter (OTC) aggregator used for crypto transactions.
The move was part of broader efforts following a new law restricting Bitcoin mining and crypto advertising.
The law specifically targets ads promoting digital assets and services that facilitate crypto transfers using Russian infrastructure.
BestChange’s shutdown has done little to deter traders, who quickly migrated to alternative platforms.
Unlike regulated crypto exchanges, these no-KYC platforms do not require users to verify their identity, allowing them to conduct transactions without linking them to personal data.
Sanctions impact inflows but fail to stop illicit transactions
US and EU sanctions have successfully reduced overall inflows to Russian no-KYC exchanges, but transactions persist.
The Russian crypto market has remained active due to local demand, particularly from users evading capital controls or using digital assets for cross-border payments.
According to Chainalysis, the decline in inflows suggests that enforcement measures are having an effect, yet new exchanges continue to appear, often filling the gaps left by those taken offline.
Many of these platforms operate as peer-to-peer (P2P) networks, allowing users to trade directly with one another, minimising the need for centralised control.
A growing concern is the role of Russian financial institutions in enabling these transactions.
Several no-KYC platforms reportedly collaborate with sanctioned banks, processing crypto payments despite international restrictions.
This has drawn further scrutiny from regulators, who are now focusing on identifying financial institutions that support these platforms.
Data collection raises security risks for Russian miners
While Russian authorities claim to be tightening controls over crypto-related activities, their efforts have raised concerns among domestic Bitcoin miners.
A new government registry introduced in early 2024 requires miners to submit sensitive data, including wallet addresses, to regulatory bodies.
Russian lawmaker Anton Gorelkin warned that if this data were leaked, it could be a “big gift” to geopolitical rivals.
Miners fear that authorities could use the collected data for crackdowns or surveillance, deterring individuals and businesses from engaging in mining operations within Russia.
The data collection effort comes at a time when Russia is expanding its focus on digital assets as an alternative financial channel.
With traditional banking restrictions tightening, the Russian government is exploring ways to integrate crypto into its economic strategy while maintaining control over domestic activity.
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