How a Crypto Exchange Leaked Data to Russian Intelligence Agencies

This story, which at first glance might have seemed like just another instance of Russian repression, actually raises a much broader question: how well protected is the personal data of users on major international cryptocurrency exchanges when Russian law enforcement agencies take an interest in it?

The man in question is 49-year-old IT specialist Yuri Belyenko, a Russian citizen with a Bulgarian residence permit. In September 2025, he was detained at a Moscow airport and later charged with “financing terrorism” due to cryptocurrency transfers in support of Ukraine. Russian investigators claim that the funds were directed, in particular, to support the Ukrainian military.

On August 17, Reuters, citing materials from the criminal case, confirmed that in 2025, Binance provided the Investigative Committee of the Russian Federation with information that made it possible to link specific transactions to Belyenky. The information provided included his date of birth, address, phone number, passport details, a copy of his Russian passport and Bulgarian residence permit, as well as transaction details.

The human rights project “First Department,” which received case materials from Belyenko’s relatives, claims that the scope of the information provided was even broader: KYC data, information on account balances, cryptocurrency deposits and withdrawals, P2P transactions, login history, device data, geolocation, and other technical information. After receiving a response from Binance, the investigation, according to human rights activists, uncovered additional transfers and expanded the scope of the charges.

It is particularly telling that Binance announced its complete withdrawal from the Russian market as early as 2023. At the same time, documents reviewed by Reuters indicate that in 2025, Russian law enforcement agencies still had a separate channel for contacting the company. Furthermore, the Investigative Committee of the Russian Federation requested that the identities of other users who had transferred funds to the same crypto wallet be identified. It is currently unknown whether the Russian side received this information.

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Binance, for its part, states that, like other global financial institutions, it complies with lawful requests from law enforcement agencies in accordance with applicable laws, privacy requirements, and regulatory standards. The company declined to comment on the specific case.

But this raises another important issue—a European one. Belyenky held a Bulgarian residence permit. On August 20, the European Commission, without commenting on the specific case, emphasized that the transfer of personal and transactional data from the EU to third countries is governed by the GDPR, and Russia does not have an EU decision on an adequate level of personal data protection. In other words, there is no unconditional and unrestricted transfer of such data between the EU and Russia. Whether the GDPR was violated in Belyenky’s case has not yet been legally established.

For us, the lesson to be learned from this story goes far beyond the fate of a single person.

Cryptocurrency does not equal anonymity. A public blockchain allows for the tracking of funds, and a centralized exchange with KYC procedures can link a specific transaction to passport information, a phone number, a device, and a specific individual.

In times of war, such vast amounts of information are no longer merely commercial or personal data. They constitute information that is potentially significant for intelligence and counterintelligence purposes—information about donors, volunteers, military personnel, aid recipients, and the connections between them.

Therefore, any sensitive transactions conducted through centralized crypto services must be evaluated just as carefully as transactions conducted through a traditional bank: if the intermediary knows who you are and whom you are paying, you should assume that, under certain circumstances, this information could end up in the hands of a third party.

Binance’s history is no reason to give up on cryptocurrencies.

This is a reason to finally abandon the illusion that technology itself automatically guarantees anonymity and security.

This is a machine translation of the original article in Ukrainian. It may contain errors.
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Source: finance.liga.net