While battling regulatory scrutiny in the US and facing lawsuits from the US SEC, Binance runs into another potential hurdle and struggles with accusations that may see the crypto exchange permanently withdrawing all operations in Russia.
Binance Contemplates Leaving Russian Markets For Good
Binance, the company that operates the largest cryptocurrency exchange by trading volume, has found itself in another regulatory predicament and has stated that it is currently deliberating discontinuing its crypto business operations in Russia.
Reports have claimed that Binance has been assisting Russians in moving funds abroad. According to the Wall Street Journal, the exchange has seemingly been aiding excommunicated Russian lenders to transport money through peer-to-peer transactions on its platform.
In response to regulatory pressures, Binance has permanently canceled five sanctioned leading Russian banks that were previously available in its P2P service, which allowed Russian users to trade their native currency, Rubles, for digital tokens.
The exchange has also reportedly been considering multiple options, including a potential exit from the Russian market.
“All options are on the table, including a full exit,” a Binance Spokesperson said.
These revelations come as the exchange faces several regulatory challenges that could potentially harm its reputation and result in serious legal consequences. The crypto exchange was previously sued by the United States Securities and Exchange Commission (SEC) for allegedly selling unregistered cryptocurrencies to investors.
The U.S. Justice Department has also been actively investigating Binance to ascertain its possible involvement in facilitating Russia’s evasion of U.S. sanctions.
Last year, Binance also shocked the crypto community and terminated crypto accounts connected to relatives of government officials in Russia, while also shutting off accounts of primary customers in Russia.
A Closer Look At The Exchange’s Regulatory Experiences
Binance has been offering crypto services in Russia for a while now. In 2022, after the European Union sanctioned Russia for its attack on Ukraine, Binance declared it would not accept deposits from Visa and Mastercard issued or made from the country. However, later in April, the crypto exchange retracted those restrictions and started accepting deposits again.
A few months ago, the EU also broadened sanctions on crypto services, banning Russians from using any crypto services registered in the country. Binance and a few other crypto exchanges had previously refused calls for a blanket ban on Russian users; however, they eventually had to adhere to regulatory requirements or face legal consequences.
Although the exchange faces many regulatory challenges, the crypto exchange has also been persevering, creating new partnerships with prominent platforms like MoonPay, a financial technology company.
Binance’s possible move out of Russia may be a reasonable step toward overcoming some of its recent legal troubles with the US.
The crypto exchange previously launched its crypto payment technology, Binance Pay in Brazil while also gaining a license in Dubai and expanding to Japan.
Its expansion to newer markets could help counter some of the after-effects the crypto exchange may incur if it does decide to exit Russian crypto markets.