European Central Bank President Christine Lagarde said this week that Russia is using digital assets to try to evade sanctions.
Michael Chobanian, founder of Ukrainian crypto exchange Kuna and manager of the Ukrainian Crypto Fund, has urged that Binance be investigated for possible collusion with Russia to circumvent sanctions.
In comments reported by CoinDesk on Thursday, Chobanian asked the European Union to open a probe to determine whether the leading crypto exchange “colluded” with Russia to help the Putin government avoid sanctions.
Chobanian, who also heads the Ukrainian Blockchain Association, told the publication he would apologize if an investigation proved Binance had done nothing wrong. He added, however, that if the allegations are confirmed, the EU must take action.
The accusations surfaced last week after Kuna’s founder made public claims that Binance had not followed through on promises and raised questions about the exchange’s role in enabling ruble transactions.
.@KunaExchange founder @ChobanianMike claims Binance has yet to make its promised $10 million donation to Ukraine.
“No one knows where it went,” he says.
He also raises questions around the exchange supporting Russian rubles for transactions: https://t.co/eSA5Qh05sR pic.twitter.com/NdOcCDIAn4
— CoinDesk (@CoinDesk) March 18, 2022
Functioning Like a “Big Bank”
Although Chobanian acknowledges there is not yet proof, he outlined a potential scenario in which Russians use Binance as a de facto “bank.” Instead of buying Bitcoin or other cryptocurrencies, those seeking to evade sanctions could simply top up accounts with rubles, convert to U.S. dollars on the platform, and withdraw funds in another country.
According to Chobanian, this process could occur without a transfer of crypto assets. “It’s a fiat-to-fiat transaction, fiat transactions,” he told CoinDesk.
That claim echoes concerns some authorities have raised that Russian actors might turn to crypto to bypass sanctions. While many industry experts and lawmakers view cryptocurrencies as offering only limited assistance to sanctioned parties and the Russian government, regulators and leaders have said the risk is plausible.
This week Christine Lagarde, president of the European Central Bank (ECB), warned that Russia is using crypto to evade sanctions, reflecting growing official concern about digital assets being used for sanction circumvention.