Binance Considering Exiting Russia Alleging Regulatory Pressure

The world-leading crypto exchange Binance has, in a recent publication by The Wall Street Journal (WSJ), portrayed as assessing all options, including exiting the Russian market. The Monday, August 28 publication captures admission by a Binance executive that the exchange is battling mounting regulator pressure. 

The Binance spokesperson disclosed to the WSJ that the crypto exchange is considering shutting down Russia operations. The revelation comes hours after the WSJ disclosed that Binance banned Russian users from exchanging cryptos. It would only allow rubles on the peer-to-peer (P2P) trading service. 

Continued Operations in Russia Market Untenable Amid Sanctions

The latest development comes after a previous week’s disclosure in a WSJ publication that Binance enabled huge ruble-based trading volume in transactions engaging the sanctioned Russian banks. The report echoed past reporting in a Bloomberg publication back in May indicating the US Department of Justice (DoJ) would investigate Binance, alleging possible sanctions violations.

The full exit consideration is further fuelled by the directive issued by US Massachusetts Senator Elizabeth Warren. The distinguished anti-crypto crusader indicated in an early August tweet that DoJ should investigate Binance for potential sanctions evasion. The Senator urged the need to enact stronger crypto regulations to avert illicit finance. 

Binance Struggles With Sanctions Imposed Against Russia

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Binance is facing regulatory animosity attributed to the sweeping economic sanctions imposed by the US and the EU citing the Russian invasion of Ukraine. The economic sanctions target leading banks, wealthy Russians, and the country’s central bank. The sanctions limit Russia’s access to the foreign currency reserves. It also hinders the Russian capability to convert rubles to other currencies.

Binance had, in a recent announcement, confirmed delisting Tinkoff Bank and Sberbank from the exchange’s platform. The move replicated action undertaken by ByBit and OKX, citing adherence to the US sanctions.

Binance’s relationship with the Russian market began in April 2022 when it unveiled restrictive measures. The restrictions targeted several entities and Russian users. Binance imposed account limits to €10,000 (~$10,900) in withdrawal-only mode. The move aligned with the EU sanctions targeting Russia.

Binance Legal Challenges Mount in the US and Beyond

The enormous scale and increased geographical presence of Binance operations worldwide have exposed the crypto exchange to regulatory challenges. 

Key among the regulatory issues is the ongoing purge by the US Securities and Exchange Commission (SEC) that initiated suit in June alleging Binance offered unregistered securities to US customers. 

The lawsuit identifies chief executive Changpeng Zhao for misleading investors and failing to avert insider trading and market manipulation. 

Binance Legal Battle Across Europe

Binance had, since May, confronted an endless wave of regulatory challenges. It began in Austria when Binance withdrew its operating license. It would later replicate the move in Cyprus and the UK, indicating the need to prioritize attention in the mature markets.

Surprisingly, Binance’s bid for an operating license in the Netherlands would be unsuccessful. The Dutch regulator indicated that Binance hardy satisfied the updated anti-money laundering laws. 

The German regulator would deny Binance license, thus preventing it from advertising its services. June was the worst month as the European banking partner PaySafe terminated the partnership. Also, the French authorities would open an investigation, citing Binance’s involvement in the aggravated money laundering.

Binance challenges would extend into Australia, where the regulator canceled the derivative business license. It added the countries it had ceased operations, including Canada. 

Editorial credit: Iryna Budanova /

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