UPDATE; Reached via email, a Caps spokesman said that they will not comment on players' ongoing contract negotiations per team policy and have no additional comment at this time.
A report from Yahoo Sports' Dmitry Chesnokov earlier this week said that Varlamov would choose the KHL over a return to the Caps, but none of this can be cemented until Friday at 12 p.m. EDT, when NHL free agency officially begins.
If Varlamov does indeed decide to leave the Caps and play in the KHL next season, they will retain his NHL rights. The Caps presented Varlamov with a qualifying offer Monday, which prevents him from becoming an unrestricted free agent Friday. If Varlamov decides to sign with another NHL team - which seems uncertain at this point - the Caps would receive draft pick compensation.
General manager George McPhee told reporters Tuesday that all three goalies - Varlamov, Michal Neuvirth and Braden Holtby - will be the only goalies that they have next season, saying that it will either be "the three that we have or the two that we have."