Effect of Supporting Sanctioned Banks? Binance Mulls Russia Exit

Binance is reevaluating its crypto business in Russia and even considering an exit from the market as the exchange is facing fresh allegations of allowing Russians to take out their money using sanctioned banks, the Wall Street Journal reported.

"All options are on the table, including a full exit," a Binance spokesperson told the publication.

Binance's Business "Gap" in Russia

Binance revealed its Russian position days after another media report revealed that the exchange was allowing its users in Russia to purchase cryptocurrencies on its peer-to-peer trading platform using six sanctioned banks. It included Tinkoff Bank, the second-largest credit card provider in the country, and Rosbank, which Société Générale previously owned.

The crypto exchange promptly dropped support for the sanctioned banks from its P2P platform, calling it a "gap" in its service.

Binance, the largest crypto exchange in terms of trading volume, was joined by ByBit and OKX to take down their support of sanctioned banks for purchasing cryptocurrencies in Russia on P2P platforms. All of them still offer services in the country, allowing payments with non-sanctioned channels.

Western Sanctions on Russia

Russia is facing stringent financial sanctions brought on by the Western governments as the country invaded Ukraine last year. Binance, along with other cryptocurrency exchanges, initially accepted the sanction rules and limited their services in Russia. In case of any violations now, the exchanges could face enforcement action in the West, along with hefty fines. Earlier, crypto exchanges like Kraken settled with US regulators for sanction violations by paying monetary fines.

Meanwhile, Binance is already engaged in legal battles with the securities and commodities regulators in the United States. The exchange and its CEO, Changpeng Zhao, are facing charges for operating illegal trading platforms, offering unregistered crypto asset securities, and commingling customers' funds.

Several US lawmakers, including Democrat Senator Elizabeth Warren, publicly attacked Binance for its dominance of the market and for alleged violations. Senator Warren further alleged that Binance made false statements to US Congress.

I rang the alarm about sanctions evasion by Russia using the crypto platform Binance—and urged @TheJusticeDept to investigate potentially false statements it made to Congress. We need stronger crypto regulations to rein in illicit finance. https://t.co/OmiWqKiD1k