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USDT caught in the crossfire of Huobi and KuCoin’s negligence

TL;DR

  • Crypto exchanges Huobi and KuCoin allegedly enable customers of sanctioned Russian banks to transact on their platforms.
  • Tether (USDT) is frequently used by Russians to move money out of the country and used through the two exchanges.
  • Justin Sun plans to move Huobi’s Asia headquarters from Singapore to Hong Kong to take advantage of the city’s crypto-friendly policies.

According to a report by digital asset data analytics firm Inca Digital, two major crypto exchanges, Huobi and KuCoin, continue to allow customers of sanctioned Russian banks to transact on their platforms.

This practice could be in violation of US and European sanctions and often involves Tether (USDT), a stablecoin that has faced scrutiny from regulators.

Huobi and KuCoin enable sanctioned Russian banks

Inca Digital Chief Executive Officer Adam Zarazinski said in an interview that Huobi and KuCoin enable people to trade crypto using debit cards issued by sanctioned Russian banks like Sberbank.

Zarazinski emphasized that Tether is frequently used by Russians to move money out of the country, and it is used by these two exchanges, in particular, to provide crypto banking services to sanctioned Russian banks.

Inca Digital’s report also highlights Binance, the world’s largest cryptocurrency exchange, which offers multiple methods for Russians to convert local currency into crypto, including via their over-the-counter trading desk and a peer-to-peer marketplace.

The report found that each of these options is open to Russians without know-your-customer (KYC) checks for up to $10,000. Chagri Poyraz, Binance’s global head of sanctions, said in a statement that the exchange is “a full-KYC platform and was the first major exchange to implement EU crypto-related sanctions.”

The Inca Digital report adds to the growing scrutiny and probes on crypto exchanges by regulators worldwide. Binance, which has been subject to numerous investigations, is currently being probed by the Securities and Exchange Commission, Commodity Futures Trading Commission, Justice Department, and the Internal Revenue Service in the US.

In addition to the mentioned findings, the report included other troubling observations about the 62 crypto exchanges it analyzed, including that some of them do not require Russians to pass KYC checks.

The lack of KYC checks raises serious concerns regarding the ability of bad actors to use these exchanges for money laundering, terror financing, and other illicit activities.

Latest on Huobi and Kucoin

Huobi, which was mentioned prominently in the report, is looking to expand its operations in Hong Kong, capitalizing on the city’s attempts to establish itself as a digital asset hub.

Crypto entrepreneur Justin Sun, who is also the founder of blockchain network TRON and an activist, said in an interview that he planned to move Huobi’s Asia headquarters from Singapore to Hong Kong and expand its staff headcount there from 50 to 200 by the end of this year.

He cited the crypto-friendly policies that were recently introduced by the Hong Kong government, including allowing retail participation in the market, as factors in his decision.

As for Kucoin, the exchange has partnered with Avalanche, a blockchain for launching decentralized applications. According to a report, KuCoin Wallet has finished the full integration of the Avalanche ecosystem on both mobile and computer.

The partnership will allow KuCoin Wallet to provide users with access to all Avalanche native assets through the integration. Users will also be able to explore a wealth of Avalanche dApps and monitor real-time assets in a unified way from all platforms.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Jai Hamid

Jai Hamid is a passionate writer with a keen interest in blockchain technology, the global economy, and literature. She dedicates most of her time to exploring the transformative potential of crypto and the dynamics of worldwide economic trends.

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