Due to Regulatory Pressure? Binance Exits Russia, Sells Operations to New Local Exchange
The crypto exchange giant assured that the assets of all Russian Binance users are safe and protected, adding that the off-boarding process is expected to take up to a year.
- As part of its plans to fully exit Russia, Binance confirmed that it sold its Russian operations to local exchange CommEx.
- Binance announcement was made on September 27. CommEx was launched on September 26.
- Little information is known about CommEx. This led some publications to question its integrity, calling it a “Russian Version of Binance.US.”
Citing that its strategy does not fit with Russian regulations, international crypto exchange Binance confirmed that it is set to fully exit all its operations in the country by entering an agreement to “sell entirely” its business to local exchange CommEx.
Binance Sells Off Russian Operations
Though the financial details of the deal were not disclosed, the sell-off was said to not allow Binance to have a revenue split or any option to buy back shares in the future.
The crypto exchange giant also assured that the assets of all Russian Binance users are safe and protected, adding that the off-boarding process is expected to take up to a year.
“There will be an orderly process for the migration of users. Binance and CommEx will partner to inform users how to migrate their assets to CommEx. A portion of Russian KYC’d new user registration will immediately be redirected to CommEx and will scale up over time,” Binance explained. “Over the next several months, Binance will sunset all exchange services and business lines in Russia. Every effort will be made to maintain a smooth user experience during this transition.”
The Reasons Behind Binance Leaving Russia
In a statement, Binance’s Chief Compliance Officer Noah Perlman clarified that the exchange “recognizes that operating in Russia is not compatible with Binance’s compliance strategy.”
The exchange also said recently that it had severed ties with Russian banks and had interacted with Irianian bad actors.
However, some reports highlighted that Binance was being used by pro-Russia to support the country’s war against Ukraine.
In February 2022, when the invasion started, several European countries and the U.S government sanctioned Russia, weakening its ability to use fiat and digital currencies around the world.
However, in May this year, the U.S. Department of Justice investigated some Russian nationals for allegedly using Binance to evade the sanctions. There were allegedly $10 billion worth of crypto transactions processed in the exchange.
This event was the start of Binance’s slow preparation to exit Russia,
Cointelegraph claimed. That even though it is still promoting its Russian operations in August, Binance Russia executives started leaving in early September.
What is CommEx?
Surprisingly, CommEx was launched on September 26, 2023, and Binance announced its sell-off agreement with the local exchange on September 27.
As of this writing, CommEx supports 25 trading pairs and allows its users for P2P transactions.
Even Binance CEO Changpheng Zhao promoted the launch of the local exchange, announcing that BNB holders will enjoy a 25% trading fee discount on CommEx.
However, because little is known about what company runs CommEX and who are its executives, some Russian publications tagged CommEx as the “Russian version of Binance.US,” Cointelegraph reported. It is mainly because CommEx’s website appears to be similar in design and functionality to Binance.US’s.
Binance Around The World
Russia seems to be among Binance’s top markets. In fact, data from SimilarWeb shows that Russians contribute 6.9% of the total visits to the Binance website.
But it should be noted that Binance also holds licenses to operate in several countries, including France, Italy, Lithuania, Spain, Poland, Sweden, and Abu Dhabi.
In the Philippines, CZ announced last year that his firm is planning to procure licenses from the financial regulators in the Philippines.
However, local policy think thank Infrawatch PH has reported Binance to the Philippine Regulators four times already. Collectively, the letters wished to regulatory agencies to ban the operations of the exchange in the country for being an unlicensed money service business.
Read more: Infrawatch Urged BSP, SEC Anew on Why It Should Ban Binance, Coinbase
“We remain confident in the long-term growth of the Web3 industry around the world and will focus our energy on the 100+ other countries in which we operate,” Perlman concluded.
This article is published on BitPinas: Due to Regulatory Pressure? Binance Exits Russia, Sells Operations to New Local Exchange
Sources:
- World’s largest crypto exchange exiting Russia amid war with Ukraine (msn.com)
- Binance successor in Russia: Everything you need to know about CommEx, so far (cointelegraph.com)
- Binance fully exits Russia with sale to CommEX (cointelegraph.com)
- Binance successor in Russia: Everything you need to know about CommEx, so far (cointelegraph.com)
- Binance Fully Exits Russia With Sale to CommEX | Binance Blog
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