Cryptocurrency giant Binance has revealed its decision to divest its Russian operations, marking a significant move in response to ongoing investigations by US authorities into potential sanctions violations. The announcement comes months after reports emerged, suggesting that the US Department of Justice was examining allegations that Russians had exploited Binance to circumvent sanctions imposed due to Moscow’s involvement in Ukraine.
In May, Bloomberg reported that the US authorities were scrutinizing whether Binance had been used as a platform for Russians to evade US sanctions. Binance, which has encountered regulatory challenges worldwide, consistently denied any wrongdoing regarding sanctions violations. However, in a statement released on Wednesday, the company declared its intention to make a “full exit” from the Russian market.
Chief Compliance Officer of Binance, Noah Perlman, explained the decision, stating, “As we look toward the future, we recognize that operating in Russia is not compatible with Binance’s compliance strategy.”
The exit process is anticipated to span a year and will involve the sale of assets to CommEX, a company that recently launched on Tuesday. In response to the Binance deal, CommEX conveyed a warm welcome to new users from Russia and around the world through a message on X, formerly Twitter.
CommEX has established an online presence with a website and channels on the Telegram messaging app, offering information in both Russian and English. However, when users posed questions about the company’s ownership and location on Telegram, representatives deflected inquiries. As of now, CommEX has not responded to requests for comment from AFP.
Binance, which operates cryptocurrency exchanges and provides various services globally, has faced significant challenges amid cryptocurrency market fluctuations and increased regulatory scrutiny. In November of the previous year, the company acknowledged that its exchange had engaged with “bad actors” in Iran following Reuters reports suggesting it had facilitated the movement of billions of dollars in violation of US sanctions.
Founded in 2017 by Canadian national Changpeng Zhao, Binance originally originated in China. However, due to China’s stringent stance on cryptocurrencies, it shifted its operations to various locations, including Singapore, Bahrain, Dubai, Paris, and the Cayman Islands, to adapt to the evolving regulatory landscape.