​Services for the return of blocked crypto assets of Russians appeared on the web

What’s new? In the dark web, Russians are increasingly being offered services to withdraw assets blocked on foreign crypto exchanges in accordance with the EU sanctions. According to Kommersant, this can be realized through the withdrawal of funds to an unblocked account or re-registration of accounts with a reset of the verification settings (KYC). Thus the service will cost 35-85% of the value of assets. Experts interviewed by the publication stressed that when applying for this service, the risk of encountering fraudsters has significantly increased. In their opinion, under such conditions, it is time to start developing Russian crypto trading platforms.

Kommersant’s material

What else does the publication report? The dark web offers to withdraw funds from such crypto exchanges as Binance, Kraken, Huobi, and KuCoin. The service appeared after the European Union imposed a complete ban on the maintenance of crypto wallets and accounts, as well as the provision of custodial services for Russian users, regardless of the amount, on October 6.

Anna Avakimyan, the chief analyst at RegBlock, suggests that accounts of 10 000-20 000 Russian users in the amount of 2-3 billion Russian rubles are blocked on crypto exchanges.

Kommersant’s source in a major IT company explained that on some exchanges, blocked accounts have interaction options. For example, they can transfer assets to another participant of the platform, which has no restrictions.

According to InDeFi Smart Bank CEO Sergey Mendeleev, services related to the unlocking of accounts can come from people who have connections with the security services of exchanges, as well as from those who have developed simple and effective mechanisms to reset KYC. In most cases, it is sufficient for Russians to provide proof of foreign residency to get unblocked. It may be any evidence of permanent residence abroad, for example, housing and utility receipts, Mendeleev says.

However, the blocking of assets can be associated not only with sanctions but also with non-compliance with anti-money laundering (AML) rules, explained BitOK founder Dmitry Machikhin. In the second case, the platform is authorized to freeze money until documents are provided, and is also obliged to report such a transaction to the police or Interpol. Machikhin specified that such issues are handled by the exchange’s internal compliance department.

Oleg Ogienko, BitRiver’s director for government relations, stressed that not all crypto exchanges supported the sanctions restrictions. According to him, this is largely due to the unwillingness to lose the promising Russian market. At the same time, Ogienko believes that the risk of blocking the crypto assets of Russians on foreign platforms will continue to grow with the introduction of new sanctions packages by Western and adjoining countries. According to the expert, Russian citizens should turn to non-custodial services to save their funds.

Ogienko believes that it is necessary to create Russian platforms for storing and buying and selling cryptocurrencies to “stimulate the development of foreign economic activity and the Russian financial market as a whole.”

In November, the Bybit exchange refused to impose restrictions on users from Russia at the urging of the Monetary Authority of Singapore (MAS).

Binance exchange CEO Changpeng Zhao called the sanctions against Russians a “tricky situation.” He said that the company is not opposed to any nation but should follow the rules of the countries in which it is licensed. Meanwhile, Binance is in talks with regulators outside the EU regarding its ability to serve Russians.

Earlier, restrictions on users from Russia were imposed by NFT platform Dapper, the Cryptopay exchange, and the Ledger wallet maker, stopping shipping to the Russian Federation. GMT Legal recommended withdrawing funds from centralized platforms licensed in the EU.

To find out which exchanges impose restrictions on customers from the Russian Federation and how the new sanctions will affect users of hardware wallets, see GetBlock Magazine’s materials.