Binance, the world’s largest cryptocurrency exchange, announced on Wednesday that it will be exiting the Russian market after selling its business to CommEX, a newly-launched crypto trading platform in the country.
In a press statement, Binance’s chief compliance officer Noah Perlman said the company made the decision to quit operations in Russia due to growing concerns about regulatory compliance amidst economic sanctions from the West. The leading crypto exchange becomes the latest in the list of international firms that have pulled out of the country since it began military operations in Ukraine last year.
Binance Exits Russia After Selling All Assets To CommEX Crypto Exchange
The buyer, CommEX, which describes itself as a “community exchange”, began operations just a day prior to the acquisition deal being announced. The firm, reportedly backed by crypto venture capitalists, went on X (formerly Twitter) to share Binance’s message and posted a welcome message to “new users from Russia and around the world”.
Binance assured that all assets of its existing Russian users “are safe and securely protected”. The company has initiated a “smooth” user off-boarding process that will take up to a year to complete and will “sunset” all crypto trading services and business lines in Russia over the coming months.
While the financial details of the deal between Binance and CommEX remain undisclosed, Binance has clarified that it will not be retaining any ongoing revenue shares from the sale or will have any buyback options.
Moreover, Binance coin (BNB) investors would get a 25% trading fee discount on CommEX, in an effort to make the onboarding process much faster.
In recent months, several multinational companies have withdrawn from Russia, including Shell, Renault, McDonald’s, Coinbase, and Adidas, among others. The firms either sold their Russian assets or completely handed over operations to local firms to comply with Western sanctions on the country over the conflict in Ukraine.
Russia was one of Binance’s biggest global markets as Russian users accounted for 6.9% of the total number of visitors to its website.
Binance Faces Regulatory Action In The U.S. Over Its Business Operations
Earlier this year, Bloomberg reported that the national security division of the U.S. Department of Justice (DoJ) was investigating whether the leading crypto exchange allowed Russian customers to access the platform in violation of U.S. sanctions on the country.
The Wall Street Journal had also reported that the exchange was being used by Russians to transfer money abroad after Western sanctions had booted the country’s banks out of the SWIFT network. In response, last month Binance cut ties with five sanctioned Russian banks listed on its peer-to-peer service that let users transfer funds in rubles.
The world’s largest cryptocurrency exchange by trading volume also faces a lawsuit in the U.S. by the Securities and Exchange Commission (SEC) for offering the sale of unregistered securities in the form of crypto tokens to customers and violating compliance rules. The regulator named Binance, its U.S.-based subsidiary Binance U.S., and CEO Changpeng “CZ” Zhao in the suit filed in June.
Binance has denied all allegations of wrongdoing and vowed to fight to prove its innocence.
Users Can No Longer Deposit Or Withdraw In EUR On Binance
Following a host of investigations against the company, PaySafe, a multinational online payments firm that facilitates fund deposits and withdrawals in euro through bank transfers, announced last week that it was terminating its partnership with Binance and would stop processing euro transactions for the exchange’s users.
Binance has since released a statement urging customers to convert their euro balances on the platform into the USDT stablecoin before the October 31 deadline. Users can also transfer their euros from Binance accounts to their bank accounts.
This means the exchange’s European customers will no longer be able to deposit EUR into their accounts, buy and sell crypto in the currency, convert cryptocurrencies into EUR, or conduct trades in EUR pairs.
The news is a big blow to Binance, which is already facing regulatory scrutiny across the world. The crypto exchange has assured users that their funds on the platform remain secured and the PaySafe issue won’t affect other crypto-related services it offers.
Despite the negative outlook over the past couple of months, Binance’s na tive crypto token, BNB, has managed to stay strong. At the time of writing, BNB is trading at $215.52 – up 1.5% from the previous day’s price.