Russia Bans Ukrainian Crypto Exchange WhiteBIT, Users Face Prison

Crypto is global, and despite geopolitical conflicts, transactions continue to flow. As of early 2026, while a few countries strictly regulate crypto, the majority, including Russia and Ukraine, recognize that the underlying technology is here to stay.

Centralized crypto exchanges operate, offering services, but as expected, every transaction is closely monitored. After Binance exited Russia, local alternatives thrived. In Ukraine, WhiteBit is especially popular.

On January 23, Russia turned its eyes on WhiteBIT, labelling the crypto exchange as an “undesirable organization.” Coinciding with this announcement, WBIT, the native token, extended losses, sliding nearly -10% in the last week. Like WBIT crypto, top cryptos like Ethereum are still under immense selling pressure at press time.

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Russia Strikes WhiteBIT

The Prosecutor General’s Office in Russia said WhiteBIT and its parent company W Group were an undesirable organizatio,n alleging that since the start of the war, they have funneled
over $11M in support of Ukraine’s armed forces. Out of the $11M, the exchange was accused of sending another $900,000 for the purchase of drones.

Russia also accuses WhiteBIT of using “gray” schemes to illegally move funds out of the country.

“This European cryptocurrency trading platform is used by cryptocurrency exchanges and exchangers to carry out various types of transactions, including organizing «gray» schemes for withdrawing funds from Russia, as well as other illegal activities.”

Because of their direct support to Ukraine, Russia, under its laws, has now labeled the exchange a threat to national security and is banning them from operating within the country. All Russian banks and financial institutions, including payment service providers, are prohibited from processing any transactions involving the popular Ukrainian exchange.

What’s more? Russian citizens and entities are barred from engaging with the exchange, and any cooperation could lead to legal penalties. Those who flout this directive and keep using, organizing people to use, or financing WhiteBIT’s operations in Russia risk prison time ranging from four to eight years.

For regular people, this ban means WhiteBIT is off-limits, forcing them to migrate to other platforms. Subsequently, this could accelerate the shift toward domestically regulated or Russia-friendly exchanges, as the government pushes for licensed operations starting in mid-2026. Meanwhile, authorities in Russia see this move as a success in their efforts to disrupt funding channels to Ukraine, viewing crypto as a tool in hybrid warfare.

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State of Crypto In Russia

Despite this, Russia’s crypto sector is booming. As of early 2026, the country is finalizing frameworks to legalize regulated trading by July 2026. With clear frameworks in place, it means retail traders and investors, who might currently have limited access, will now fully dive into crypto.

Additionally, Russia is keen on using crypto as a tool to bypass sanctions and boost trade. By mid-2025, crypto inflows hit nearly $400Bn primarily driven by the DeFi explosion and the introduction of crypto products like crypto-backed loans by Sberbank.

JUST IN: Russia’s largest bank, Sberbank, is considering launching crypto-backed loans that would provide ruble lending secured by digital assets – TASS. pic.twitter.com/NM1bkIqwS0

— Whale Insider (@WhaleInsider) December 26, 2025

Beyond DeFi, Russia is a big player in Bitcoin and crypto mining. President Vladimir Putin legalized crypto mining in late 2024, allowing, for example, private miners to deploy rigs without registration if their monthly electricity consumption stays below a government-set limit of around 6,000 kWh per month. Those who exceed this limit must register, pay taxes, and comply with Russia’s anti-money laundering laws.

– Has Russia started to utilize alternative [payment] instruments in international trade?

– We’ve passed new laws, as an experimental-policy you can now utilize Bitcoin, which we mined in Russia as mining has been legalized as well. These transactions do take place. pic.twitter.com/FsxkFn51Ns

— Katie | CitizenX (@PlanBpassport) December 25, 2024