Binance, the world’s largest cryptocurrency trading platform by volume, is reportedly considering a potential complete withdrawal from the Russian market.
A spokesperson from the company disclosed this development during an interview with The Wall Street Journal (WSJ), shedding light on the profound complexities engendered by Western sanctions.
“All options are being considered, including complete withdrawal,” the unnamed source told WSJ.
Historically, Russia occupied a pivotal role in Binance’s global operations. However, recent geopolitical and legal upheavals have transformed the landscape into a “headache” for the exchange. The spokesperson revealed that Binance is exhaustively exploring all options, including the possibility of a full-scale retreat from the Russian market, citing the country’s mounting legal challenges and geopolitical uncertainties.
As per the WSJ report, the situation was exacerbated by reports that Binance was facilitating fund transfers for Russians seeking to move money overseas. This revelation further worsened the legal tribulations that Binance faces, particularly in the United States.
Following the commencement of the Russian military intervention in Ukraine, Binance affirmed its compliance with Western sanctions by imposing restrictions on Russian users. Subsequently, the exchange took stringent measures by imposing constraints on Russian users’ access to its Peer-to-Peer (P2P) services. Effective August 26, only ruble transactions were permissible for users residing within Russia’s borders on the P2P platform.
Notably, the dynamic in Russia shifted in 2022, after the disconnection of major Russian banks from the SWIFT network. Consequently, P2P services emerged as a conduit for transferring funds abroad or purchasing cryptocurrencies.
Binance initially began curtailing access to P2P transactions in US dollars and euros for Russian users in compliance with EU sanctions. This limitation subsequently extended to encompass ruble transactions in response to the EU’s sanctions targeting Russia.
However, the WSJ’s sources pointed out that Binance continued to facilitate substantial transactions denominated in Russian rubles. In response, the US Department of Justice has reportedly initiated an investigation into Binance to ascertain any possible contraventions of sanctions imposed against Russia.
Earlier this month it emerged that the agency was torn between charging the exchange with fraud or slapping it with fines over fear that the former could initiate a bank run, similar to the one that faced FTX.
That said, allegations surrounding Binance’s facilitation of Russian efforts to evade sanctions are being probed by regulatory authorities across various nations, including regulatory bodies in Australia, Canada, Austria, France, and Belgium. This intensified scrutiny has culminated in a series of high-level departures from certain European markets by Binance in recent months.