It seems like Binance, the world’s foremost crypto exchange, is amidst the throes of an existential crisis regarding its future prospects in Russia. Recent intensification of Western sanctions on Russia is making Binance reconsider its stand, and as we learned from an inside source on Monday, they don’t shy away from contemplating an absolute departure.
Binance’s potential full exit strategy appears to be born in response to the increasing criticism for its supposed role enabling transactions connected with sanctioned Russian financial institutions. In a rather astonishing disclosure last week, it came to light that Binance customers had access to a quintet of sanctioned Russian banks including Rosbank and Tinkoff Bank for facilitating peer-to-peer transactions.
A blowback to this event was Binance’s prompt termination of interactions with the five blacklisted Russian banks on their peer-to-peer ruble-driven services. In a similar vibe, cryptocurrency exchanges such as Bybit and OKX have started to pull out particular Russian banks from their peer-to-peer platforms.
On the other side of this story, let’s not forget that as early as July, Russian President Vladimir Putin had legally sanctioned to usher a digital form of the national currency, thereby empowering the Bank of Russia to maintain the digital ruble’s operational duties.
Naturally, this announcement has been brewing beneath the cloud of Binance’s increasing legal issues across the globe. With intense legal battles spanning across various countries, to say the least, Binance’s legal worries are escalating. It’s noteworthy that lawsuits have been rolling in against Binance from institutions like the Commodity and Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
One of the fascinating highlights of these accusations is the blatant disregard for federal securities laws spearheaded by Binance, which allegedly broke these laws by making unregistered securities available to the general public. These include BNB tokens and BUSD stablecoins, part of their extensive offering.
Adding to these charges, the SEC’s findings also pointed towards Binance’s failure to register as a broker as well as an exchange. Meanwhile, Binance is also accused by the CFTC of knowingly assisting US customers in bypassing crypto trading restrictions put forth by its US affiliate.
Whispers of potential indictments by the US Department of Justice against Binance and CEO Changpeng Zhao for possible infringement of anti-money laundering laws are rife. As a ripple effect to these accusations, multiple Binance top representatives, including General Counsel Hon Ng, Chief Strategy Officer Patrick Hillmann, SVP for Compliance Steven Christie, and ex-IRS agent Matthew Price, have decided to vacate their positions in the company.
With such a trajectory, Binance’s continous participation in the Russian market is clearly treading hot water. Only time can reveal the aftermath of this ongoing turmoil.