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Binance, the world’s biggest cryptocurrency exchange, is exiting Russia by selling its business in the country to a venue that launched only a day ago.
Binance on Wednesday said it intends to cease all exchange services and business operations in the country over the coming months and would sell the assets for an undisclosed sum to CommEX.
After this, it will not retain any ongoing revenue shares from the sale or have any buyback options, “unlike similar deals from international companies in Russia”, it added.
The move comes two months after the exchange denied media reports it had helped customers move funds held in sanctioned Russian banks out of the country.
“As we look toward the future, we recognise that operating in Russia is not compatible with Binance’s compliance strategy,” said Noah Perlman, the group’s chief compliance officer.
The asset has been bought by CommEX, which launched on Tuesday. Its website has few details about its background but says it is backed by an unnamed “top-tier crypto VC [venture capital]”.
Crypto exchanges such as Binance have become the primary means for hundreds of thousands of Russians who left the country following its invasion of Ukraine — many of whom still work for Russian companies or rent out property there — to move money back and forth. Many Russian banks have been cut off from international payment systems.
Unlike some US-based platforms, Binance introduced only a small number of restrictions for its clients in Russia including banning direct deals exchanging the rouble for dollars or euros, but otherwise allowing them to use the exchange freely. In April, the firm lifted restrictions on the €10,000 limit on the value of assets Russians can have in their accounts, which was imposed a year earlier.
Changpeng Zhao, the founder of Binance, said holders of the exchange’s in-house coin BNB would “enjoy a 25 per cent trading fee discount” on CommEX. Moving Russian Binance users to the new venue would take up to a year and “all assets of existing Russian users are safe and securely protected”, Binance said.
The opaque nature of the buyer has ignited speculation within the Russian crypto community as to who might be behind it.
Binance remains the world’s largest crypto exchange, despite falling market share amid regulatory investigations into the exchange and its owner.
The firm is facing lawsuits from the largest US markets regulators alleging it illegally accessed US customers, violated securities laws and mixed billions of dollars of customer cash via a separate entity owned by Zhao.
The firm has previously described a Commodity Futures Trading Commission lawsuit as “unexpected and disappointing”. It said it was disappointed and disheartened by a separate lawsuit filed by the Securities and Exchange Commission, which its US affiliate called “baseless”, and has pledged to contest the suits from the two regulators.
Source: Financial Times