Binance is considering withdrawing its platform from Russia. This is amid rising attention that the largest cryptocurrency exchange is allowing Russian investors to evade US sanctions, which were implemented after the Ukraine invasion.
Binance has recently removed some Russian banks from accessing payment options on its peer-to-peer platform. Fiat currency restrictions were also introduced for Russia-based users.
Binance’s Russian services
As the biggest crypto exchange in trading volumes, Binance offers its services in many countries. However, it has received negative responses from authorities relating to its activities in Russia, following the beginning of the Ukraine war.
The US Department of Justice was investigating whether Binance was used by Russians to escape imposed financial sanctions, according to a Bloomberg report in May 2023.
More recently, the US Senator Elizabeth Warren urged the Department of Justice to investigate Russians using Binance for sanction evasion. She posted on X (formerly Twitter): “We need stronger crypto regulations to rein in illicit finance.”
The US, European Union, UK, and other countries introduced economic sanctions on Russia after the Ukraine invasion began in February 2022.
The imposed sanctions were aimed at the country’s central bank, as well as other major banks and oligarchs.
Binance did introduce measures to restrict Russian users in April 2022, soon after the war started. Restrictions were placed on Russian users and businesses. Accounts with more than $10,900 were put into a “withdrawal-only” category.
Binance removing sanctioned banks
Binance has introduced more restrictions recently, but this followed criticism against the exchange. The Wall Street Journal reported on 22 August that Binance was listing sanctioned Russian banks such as Tinkoff and Rosbank as transfer methods for peer-to-peer payments.
After criticism that Binance may be violating sanctions by providing these payment methods, there were reports that the exchange eliminated the banks from this service.
However, both of the banks had reappeared, this time using code words. The word “green” was used for Rosbank and “yellow” represented Tinkoff.
These banks were finally removed on 25 August, according to a report from The Wall Street Journal.
A Binance spokesperson said: “We regularly update our systems to ensure compliance with local and global regulatory standards. When gaps are pointed out to us, we seek to address and remediate them as soon as possible.”
Bybit and OKX react
Two other crypto exchanges followed Binance’s move and excluded Russian banks in their payment options. Bybit and OKX disabled peer-to-peer transactions to Tinkoff Bank and Sberbank.
Russia-based users are no longer able to receive fiat money in exchange for their crypto via these two banks on the exchanges.
OKX still allows users to make transactions with the Raiffeisen Bank Russian Branch, as well as a the Russian Standard Bank. However, both of these are not sanctioned by the US.
Binance implements fiat restrictions
Binance has also recently banned Russian residents from using all fiat currencies, aside from the Russian ruble.
Russian users of the exchange can only use the ruble via the Binance peer-to-peer platform. But they must have completed know your customer checks.
Meanwhile, Russian clients outside of their home country face stronger limitations. Users who fall into this category are not able to use the ruble, the US dollar, or the euro.
The new restrictions mainly impact Russians who live abroad and need to convert their Rubles from Russian banks to other currencies using Binance’s peer-to-peer service.
“We apologize for the inconvenience. If you have any questions or need assistance regarding this update, please contact Binance Customer Support,” Binance said in the announcement.