Millions of US dollars worth of cryptocurrency were sent to centralized exchanges (CEX), particularly Binance, from wallets that provide funds to support Russian war efforts in Ukraine, transaction data suggest. According to Ukrainian analysts, the funds were transferred to crypto trading platforms to be laundered.
More than 90% of the pro-Russian crypto transfers identified in the study are sent to the largest exchanges
According to an analysis of such transactions conducted by Hapi Labs, more than $40 million was sent to cryptocurrency exchanges last year from wallets used to sponsor the Russian invasion of Ukraine. The main purpose of these transfers was money laundering, the Ukrainian startup claimed in aTwitterpost published Tuesday.
Various amounts flowed to many crypto platforms, but nearly 96% of the digital cash reached Binance, the world’s largest cryptocurrency exchange. Researchers at the company, which provides blockchain tracking tools and data analysis software, believe this indicates a failure of anti-money laundering (AML) procedures.
At the same time, the amount of reverse transfers from exchanges to wallets used to support Russia’s war against Ukraine is much more modest, the decentralized security protocol developer noted.
“Binance is still one of the leaders, but as you can see, it’s not the only one. Best wishes to @FTX_Official and others in bankruptcy!” they said in another tweet. Two other major centralized exchanges, Kucoin and the European, Ukraine-based Whitebit, are also in the top five, along with oneinch of decentralized aggregators.
Hapi Labs has tracked donations of arms and ammunition for the Russian military and various private military companies, including groups associated with two self-proclaimed republics in the Russian-backed Donetsk and Luhansk regions, Mark Retsyuk, head of analysis and research at the company, crypto news outlet told Forklog.
A Ukrainian blockchain forensics expert noted that exchanges often do not block wallets involved in financing Russian military aggression for more than six months, despite requests from law enforcement authorities.
“Centralized exchanges should block such wallets as soon as possible after notification. But most often they are not blocked at all or are blocked very late, when dirty funds have already passed through it and the account is empty,” Letsyuk commented on the findings.
He also pointed out that Whitebit, in cooperation with Hapi Labs and Ukrainian special services, responds most quickly to alerts from law enforcement and cybersecurity firms