This has not been confirmed by the Caps and the team has a long-standing policy not to comment on ongoing contract negotiations. Varlamov is a restricted free agent and cannot sign elsewhere until Friday at 12 p.m. EDT when free agency begins around the NHL.
KHL club Lokomotiv Yaroslav owned Varlamov's rights when he left for the NHL, but a battle with SKA - whose president, Alexander Medvedev, happens to be the president of the KHL - ensued over those same rights.
Such speculation continues to run rampant over Varlamov's future. An earlier report from ESPN.com stated that a source has said that the Caps will not look to trade Varlamov. As said before, none of this has been confirmed and more information will be added as it becomes available.