Cryptocurrency giant Binance has elicited the sardonic irony of the international crypto community with its latest move to eliminate Banco de Venezuela from its peer-to-peer payment options. This comes without any formal acknowledgment from the exchange, however, mirrors the consequences of enduring financial sanctions set down by the United States Treasury Department.
Astonishingly, the state-backed Venezuelan bank is precluded from the shortlisted P2P service options, mirroring the plight of Russia’s Tinkoff and Sberbank earlier this week. In contrast, privately-owned Venezuelan banks such as BBVA Provincial, Banesco, and Banplus continue to enjoy a presence on Binance’s P2P service.
The silenced removal of Banco de Venezuela, a major player in the country’s banking sector with a dominant market share of 11% and assets worth over $4.1 billion, from Binance’s service list underlines the unintended consequences of economic sanctions. Especially since, in the words of Humberto Quevedo, the Vice President of the National Association of Cryptocurrencies (Asonacrip), the bank holds a pivotal role in Venezuela’s digital currency ecosystem by offering a unique direct exchange between USD tether (USDT) and bolivars through Binance.
Whilst it is understandable that Binance, a platform that faced regulatory scrutiny, would comply strictly with international sanctions for specific financial institutions, it also raises keen disquietude among Venezuelan crypto enthusiasts who worry about the possible implications of Binance’s decision considering its substantial retreat from the Latin American and Middle Eastern markets.
Binance’s intent of adhering to compliance with foreign sanctions does introduce an element of cynicism. A recent Wall Street Journal report indicated that despite sanctions, the exchange continued to offer services to Russian customers. Although Binance has since delisted Tinkoff and Sberbank from its services, local reports suggest that users can circumnavigate the ban due to the nature of P2P services by adding account details to private messages to merchants.
These enforcement gaps are acknowledged by Binance as it promises to meet local and global regulatory standards diligently. Yet, such vows often collide with the practicalities of implementing a universally compliant system that can prevent users from exploiting P2P services to bypass restrictions.
The story doesn’t end with Binance as other notable exchanges like ByBit and OKX have also delisted both Russian banks from their P2P services in step with sanctions from the United States Treasury Department. As such, it underscores the delicate balance that cryptocurrency exchanges must strike between adhering to regulations and maintaining the open, borderless essence of blockchain technology.
Source: Cryptonews
