The cryptocurrency exchange giant, Binance, is considering leaving the Russian market amidst ongoing controversies surrounding its operations in the region. Reports from the Wall Street Journal on August 28 revealed that a Binance representative stated, “all options are on the table, including a full exit.” This potential exit comes at a time when the company has introduced new rules for its peer-to-peer (P2P) exchange users in Russia, further adding to the speculation surrounding Binance’s future in the country.
Binance recently announced several new rules for its P2P exchange users in its Russian Telegram channel. The company stated that Russian users can now only trade on the P2P platform using fiat currency in rubles (RUB) and that this option is limited to KYC-verified users residing in Russia. This move may come as a setback for users residing outside of Russia, as they are no longer permitted to trade rubles on the P2P exchange. Furthermore, these users are also barred from trading with the euro (EUR), the U.S. dollar (USD), and the Ukrainian hryvnia (UAH). Interestingly, it seems that even rubles are no longer available as an option for non-Russian users, as the platform did not list rubles when accessed by CryptoSlate from a U.S. location.
One of the main controversies surrounding Binance’s operations in Russia relates to its support of sanctioned Russian banks on its P2P platform. In response to the backlash, the company removed five of these banks on August 25, but it continued to offer support for other Russian payment options. At the time, approximately 16 banks and payment channels were listed as available on the platform. This raised concerns and sparked speculation about Binance potentially violating sanctions imposed by the U.S. Department of Justice (DOJ), which has been investigating the company since May.
According to previous reports by the Wall Street Journal on August 22, Binance witnessed a substantial amount of P2P trading activity in Russia, with users conducting approximately $428 million in trades between October 2021 and March 2022. This high trading volume further intensified the scrutiny on Binance’s operations in the region. The ongoing DOJ investigation into the company’s potential violations of sanctions has added fuel to the fire, as Binance faces mounting legal and regulatory challenges.
While Binance has faced controversies before, the current challenges primarily center around its P2P exchange rather than its main exchange. The company previously imposed account limits on its main exchange to comply with sanctions against Russia in April 2022 but has since lifted those restrictions without much controversy. As of now, Binance has not provided any additional comments regarding its potential exit from the Russian market. However, given the mounting legal and regulatory pressures, it remains to be seen whether the cryptocurrency exchange giant will indeed make a full exit or find alternative solutions to resolve the ongoing controversies.