Dubai-based exchange Coinsfera is attracting traders from countries under sanctions, including Russia and Iran, Bloomberg reported.
Coinsfera is a crypto over-the-counter (OTC) desk which allows its users to make large trades under the public markets’ radar and turn them into cash in Dubai. The process takes minutes and only requires an identity document and a couple of questions compared to other crypto exchanges that use the KYC process.
Neutral trading ground in Dubai
Since Putin’s invasion of Ukraine in February, many Russians have fled to the UAE, which remained neutral and hasn’t imposed any sanctions on the country or individuals, while most crypto trading platforms like Binance and Coinbase have blocked or restricted the accounts associated with Russia. Meanwhile, Russian users have been using Coinsfera for “sizable transactions,” according to Bloomberg’s sources.
The exchange, with offices in Dubai, Istanbul, London, and Kosovo, was launched in 2015 and has attracted users from countries sanctioned by the West long before the Russian-Ukrainian conflict.
Coinsfera describes itself as a “cashpoint” where customers “are not constrained by trade restrictions.”
“Any quantity of money may be obtained with ease, at the lowest possible cost, and in the shortest period feasible. Users may easily sell or buy bitcoin in Dubai with a valid ID from any nation,” the company’s official announcement said, raising concerns about the nature of activities these transactions might be sponsoring.
A UAE government official insisted that the country was working tirelessly to “combat the cross-border threats of illicit activity in the crypto industry and uphold the integrity of the financial system” when asked about the ramifications of such transactions.
Reinforcing a crypto-friendly image
Dubai has recently emerged as a crypto hub, welcoming more and more crypto companies to the city.
Binance, the biggest crypto exchange, has recently moved its headquarters to Dubai, becoming “the firm’s HQ by any common interpretation.”
Earlier this year, FTX, Binance’s largest rival, received approval to operate as the first crypto exchange in the city.
“The certainty and credibility that Dubai assures in its adherence to these commitments allow FTX to safely pursue its overall strategy of scaling towards becoming the first virtual-asset service provider to enter global markets in a fully regulated manner,” an FTX representative said at the time.