Binance Allegedly Used Sanctioned Banks for P2P Crypto Transfers in Russia

Binance aided peer-to-peer (P2P) crypto transfers among Russians using at least five banks sanctioned by Western governments after Russia launched a full-scale invasion of Ukraine last year, the Wall Street Journal reported today (Tuesday). Citing the apex monetary authority in Russia, the outlet said Russians traded about $428 million in P2P transactions within five months.

Binance Denies Sanction Violation in Russia

Last year, several top countries, including the UK, announced sanctions against Russian banks and high-net-worth individuals in response to Russia’s war on Ukraine. During this period, Binance announced restrictions on its services in the country.

In the report, the Journal claimed that Binance volunteers informed users on Telegram that the crypto exchange was not imposing trading restrictions on Russians. Earlier in the year, Finance Magnates reported that Binance quietly lifted its restrictions on Russian users. The users were able to deposit Russian rubles, euros, British pounds, and other currencies using bank cards issued in the country. Additionally, the exchange removed the limits on balances of more than EUR 10,000 on Russia-linked accounts, according to a report by Forklog.

However, Binance has rejected the claims in the Journal report. A spokesperson from the exchange told Fortune that the leading digital asset company doesn't have any affiliations with any banks, whether in Russia or any other location, in connection with its P2P programme.

Binance Faces Increasing Scrutiny

Meanwhile, the report emerges as Binance faces legal battles on multiple fronts, particularly in the United States. In March, the Commodity Futures Trading Commission (CFTC), which has been investigating Binance since at least 2021, initiated legal action against the exchange, alleging that the firm was operating as an illegal crypto derivatives exchange in the country.

Among other allegations, the CFTC claimed that Binance starting from July 2019 guided US customers on how to circumvent the exchange’s compliance measures despite claiming to have prohibited them from its platform. However, Binance rejected these allegations and is now seeking their dismissal.

Earlier in June, the US Securities and Exchange Commission sued Binance, accusing Binance and Founder/CEO Zhao of operating illegal trading platforms, offering unregistered crypto asset securities and commingling customers’ funds. Binance is still fighting the case at a federal court in the United States.

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