Binance Cuts Ties: 5 Russian Lenders Axed Amidst Intensifying Scrutiny

According to a recent report by the Wall Street Journal, cryptocurrency giant Binance has ceased offering its clients the option to conduct peer-to-peer transactions through sanctioned Russian banks. 

This decision comes just days after a Wall Street Journal exposé shed light on how the exchange allegedly facilitated the movement of funds from Russia to other countries.

Binance Halts Peer-to-Peer Transactions With Sanctioned Russian Banks

Previously, Binance’s peer-to-peer service allowed users to transfer rubles to one another using five sanctioned Russian lenders. However, these banks have now been removed from the platform as a transfer method.

When questioned about the removal of the banks, a spokesperson from Binance remarked: 

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. 

Per the report, the spokesperson further emphasized that payment methods conflicting with their compliance policies are unavailable on the platform.

According to the Wall Street Journal, the company allegedly facilitated peer-to-peer trades of rubles for digital tokens, often involving sanctioned banks, including Rosbank and Tinkoff Bank. 

The exchange allowed clients to convert funds held in these banks into balances on Binance through a network of intermediaries.

Despite these actions, Binance’s exchange has continued to handle substantial trading volumes in rubles, per data compiled by CCData. Last year, Binance announced that it had ceased operations in Russia and was adhering to Western sanctions requirements.

US DOJ Probes Potential Violations Of Russian Sanctions

The recent revelations regarding Binance’s activities in Russia may escalate the company’s legal challenges in the United States. The US Department of Justice has been investigating potential violations of American sanctions on Russia by the exchange.

In response to these allegations, the exchange spokesperson affirmed: 

Binance aims to diligently comply with global sanctions rules and enforces sanctions on individuals, organizations, entities, and countries blacklisted by the international community, denying them access to the platform.

According to the report, despite the measures taken, some traders in Binance’s official Telegram chat group for Russian clients claimed they could still utilize sanctioned banks by selecting alternative payment options and providing their Rosbank or Tinkoff bank details. Neither bank has responded to inquiries.

The Binance spokesperson assured: 

We are aware of efforts to circumvent our controls, and we are proactively taking action to ensure that controls remain strong.

Moreover, on Binance’s peer-to-peer service, sellers share their bank account details with buyers to enable direct fund transfers. The exchange holds the sellers’ cryptocurrencies in escrow until they confirm receipt of the payment, earning a fee for facilitating the transaction.

This latest development comes at a time when the Justice Department’s investigation into Binance’s potential involvement in facilitating Russians’ evasion of US sanctions has been ongoing since at least May. 

As the scrutiny intensifies, the exchange finds itself under increasing pressure to navigate the complex landscape of regulatory compliance and address concerns related to its operations in Russia.

Featured image from iStock, chart from TradingView.com