How Five Platforms Keep Crypto Flowing Around Banking Controls
Blockchain analytics firm Elliptic released a report this weekend showing how five cryptocurrency exchanges connected to Russia are still processing massive transaction volumes outside the reach of Western financial controls. Bitpapa, the only one actually on the U.S. Treasury’s sanctions list, sent nearly 10% of its outgoing transactions to wallets already blacklisted by Washington. The other four—ABCeX, Exmo, Rapira, and Aifory Pro—haven’t been officially sanctioned yet, but Elliptic estimates they’ve handled over $30 billion in combined crypto flows since 2022.
Analysts at Elliptic describe what they call a “hydra effect.” When authorities shut down one platform—like when they seized Garantex’s domains in early 2025—the money just moves somewhere else. These exchanges use wallet rotation, peer-to-peer trading rooms, and cash-to-stablecoin conversion services to hide where funds are coming from. Users rely heavily on dollar-pegged tokens like USDT because these bypass the normal screening processes that traditional banks use.
The numbers tell a bigger story that other forensics firms are seeing too: wallets linked to illicit activity or sanctions violations received more than $150 billion worth of crypto in 2025, the highest amount on record. Rather than slowing down, the flow is actually picking up speed as Russia’s domestic crypto mining industry grows. Two major mining operations, BitRiver and Intelion, brought in roughly $200 million last year and now produce more than half the country’s legally mined bitcoin, according to industry data.
Regulators Are Trying to Catch Up
Lawmakers are starting to respond. Brussels is considering a complete ban on any crypto transaction involving Russian parties. The proposal, floated in February 2026, would be the first time the European Union goes after crypto activity as a whole category instead of just listing specific wallets or companies. Over in Washington, the Office of Foreign Assets Control has expanded its secondary sanctions authority, warning that even non-Russian exchanges could face penalties if they provide “material support” to blacklisted entities.
The problem is that enforcement can’t keep pace with how quickly these operations adapt. When OFAC sanctioned Garantex, trading volume immediately surged on ABCeX—which operates out of the same Moscow office building Garantex vacated just months before. Similarly, Exmo promised back in 2022 to pull out of Russia, but Elliptic found shared custody wallets and nearly $20 million in transfers between Exmo’s international platform and sanctioned exchanges.
Regulators admit they’re playing catch-up. European officials acknowledge that an outright ban might just push transactions into peer-to-peer channels or private wallets, making them even harder to track. U.S. agencies are investing in blockchain analytics tools and cross-border intelligence sharing, but they’re trying to balance national security concerns against the risk of strangling legitimate crypto innovation. Industry observers worry that overly broad rules could splinter liquidity, push Russian users further underground, and pile more compliance costs onto platforms that are already following the rules.
What This Means for Traders, Businesses, and Everyday Users
For traders, the short-term effect has been surprisingly mild. Bitcoin and major altcoins haven’t reacted much to Elliptic’s latest findings, suggesting the market already expected this level of sanction evasion. But liquidity could become fragmented if the EU actually passes its blanket ban. Euro-denominated stablecoin trading pairs might split between “clean” and “grey” pools, which would widen spreads and increase counterparty risk.
Compliance Teams Face Tougher Challenges
Compliance departments are dealing with the sharper end of this problem. When exchanges constantly rotate their deposit and withdrawal addresses, it breaks the automated screening tools that companies rely on. Firms are now adding behavioral analytics—identifying wallets by transaction timing, fee patterns, and which protocols they use—to supplement traditional blacklist checks. Smaller companies may not be able to afford this added layer, making outsourced transaction monitoring more attractive.
What Retail Users Should Expect
If you’re an everyday crypto user, get ready for stricter identity verification requirements and longer wait times when you want to withdraw funds. Exchanges are upgrading their risk detection systems to avoid getting caught up in sanction violations. It’s frustrating, but these measures exist to keep mainstream crypto access available at a time when complete bans are being seriously discussed. The bigger takeaway is that crypto’s openness is a double-edged sword—it gives people in restrictive countries financial freedom, but it also requires constant vigilance to prevent the technology from becoming a permanent workaround for sanctions.
