Russia-Linked Crypto Exchanges Bypassing Sanctions, New Report Reveals

A bombshell new report from blockchain analytics firm Elliptic has uncovered a sprawling network of cryptocurrency exchanges allegedly helping Russian users evade Western sanctions by moving funds outside the traditional financial system’s reach. The findings, released Saturday, detail how five trading platforms—most operating without formal sanctions—continue facilitating high-volume crypto transactions that circumvent oversight.

The Sanctioned Few, The Unchecked Many

While only one platform, peer-to-peer marketplace Bitpapa, currently faces US sanctions from the Treasury’s Office of Foreign Assets Control (OFAC), Elliptic’s investigation reveals concerning patterns across the entire network. The firm found that approximately 9.7% of Bitpapa’s outgoing transactions were directly linked to sanctioned entities, with the exchange employing sophisticated tactics like frequent wallet address rotation to complicate monitoring efforts.

“The scale of this operation is staggering,” notes Tom Robinson, co-founder of Elliptic. “What we’re seeing isn’t just isolated incidents—it’s a coordinated ecosystem designed specifically to bypass financial restrictions.”

Moscow’s Crypto Command Center

Perhaps most alarming is the discovery that ABCeX, an unsanctioned exchange operating from Moscow’s Federation Tower, has processed at least $11 billion in cryptocurrency transactions. This same building previously housed Garantex, another exchange whose domains were seized by US authorities in March 2025. Elliptic’s analysis shows ABCeX maintains significant transaction flows with Garantex and Aifory Pro, suggesting the sanctions have merely redirected rather than eliminated these financial channels.

The report also exposes concerning connections between seemingly separate entities. Exmo, which claimed to exit the Russian market following the 2022 Ukraine invasion by selling regional operations to Exmo.me, appears to share custodial infrastructure and pooled hot wallets with its supposed successor. Elliptic recorded over $19.5 million in transactions between Exmo and multiple sanctioned exchanges including Garantex, Grinex, and Chatex.

The Global Reach of Sanction Evasion

The network’s international scope extends far beyond Russia’s borders. Rapira, registered in Georgia but maintaining Moscow offices, sent over $72 million directly to sanctioned exchange Grinex before Russian authorities raided its offices in late 2025 amid suspicions of capital transfers to Dubai.

Aifory Pro operates cash-to-crypto services across Moscow, Dubai, and Turkey, offering virtual payment cards funded with USDT that enable Russian users to access services restricted by Western providers. Elliptic traced nearly $2 million from Aifory Pro to the Iranian exchange Abantether, highlighting how these networks create transnational financial corridors outside regulatory control.

Sanctions Shifting, Not Stopping

The data presents a sobering reality: enforcement actions appear to be redirecting rather than eliminating illicit crypto flows. Following Garantex’s shutdown, transaction volumes surged on alternative exchanges, creating a game of regulatory whack-a-mole that authorities struggle to contain.

This pattern aligns with broader industry data showing illicit cryptocurrency addresses receiving record volumes. Chainalysis reported that addresses associated with illegal activities received $154 billion in 2025, while TRM Labs produced a similar estimate of $158 billion—figures that represent all-time highs and suggest sanctions evasion represents just one facet of a much larger problem.

Europe Considers Blanket Crypto Ban

The revelations come as European Union officials debate unprecedented measures, including a potential blanket ban on all cryptocurrency transactions involving Russia. The proposed restrictions aim to close the loopholes that these exchanges exploit, though implementation faces significant technical and diplomatic challenges.

“This isn’t just about Russia,” explains a senior EU finance official speaking anonymously. “These platforms create vulnerabilities that any sanctioned entity could exploit. The question is whether we can effectively regulate a technology designed to operate outside traditional financial controls.”

The Mining Connection

The report’s timing is particularly significant given Russia’s expanding industrial crypto mining sector. In 2024, the country’s two largest operators, BitRiver and Intelion, generated a combined $200 million in revenue, accounting for more than half of Russia’s legal mining market. This growth provides additional infrastructure that could potentially be leveraged for sanction evasion activities.

The Cat-and-Mouse Game Continues

As authorities scramble to respond, the exchanges identified in Elliptic’s report continue operating, adapting their methods to stay ahead of enforcement actions. The use of shared infrastructure, international offices, and sophisticated obfuscation techniques demonstrates how determined actors can exploit the decentralized nature of cryptocurrency to achieve their objectives.

The findings raise fundamental questions about the effectiveness of sanctions in an increasingly digital financial landscape and whether traditional regulatory approaches can keep pace with technological innovation designed to operate beyond their reach.

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