Binance announced in a press release on 27 September that it was selling all of its Russian operations to an obscure company called CommEX. When this move completes, the world’s largest cryptocurrency exchange will end its business in Russia.
"As we look toward the future, we recognize that operating in Russia is not compatible with Binance's compliance strategy. We remain confident in the long-term growth of the web3 industry around the world and will focus our energy on the 100+ other countries in which we operate," Noah Perlman, Binance's chief compliance officer, was quoted as saying.
There will be an orderly process for the migration of users. Binance and CommEX will partner to inform users how to migrate their assets to CommEX. A portion of Russian KYC'd new user registration will immediately be redirected to CommEX and will scale up over time. Over the next several months, Binance will sunset all exchange services and business lines in Russia. Every effort will be made to maintain a smooth user experience during this 12-month transition.
While financial details of the deal will not be disclosed, it is important to note that with this sale, Binance fully exits Russia. Unlike similar deals from international companies in Russia, Binance will have no ongoing revenue split from the sale, nor does it maintain any option to buy back shares in the business.
CommEX a crypto exchange that officially launched on 26 September, one day ahead of Binance’s announcement. It listed BTC/USDT and ETH/USDT trading pairs for spot trading back in July, according to Coindesk.
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CommEX said it would not accept customers from the US, EU and some other jurisdictions.
“Do or die situation”
Doing business in Russia seems to have been in violation of US sanctions as transactions continued to be served by local banks. Binance warned last August that it would ultimately cut the ties with those banks.
Russia, however, isn’t the only problem Binance faces now. The exchange has fought several investigations by the US Departments of Treasury and Justice these months and some senior managers were slapped with lawsuits. The legal pressure pushed new investors away from Binance and other crypto exchanges, while existing customers reacted with massive withdrawals.
Last June alone, the exchange endured more than 500 million dollars in net outflows on the background of severing conflicts with the US authorities.
According to a recent Wall Street Journal report, a Binance co-founder warned employees that the company was in a "do-or-die situation" amid major staffing layoffs and troubles with financial regulators.
"Every battle is a do-or-die situation, and the only thing that can defeat us is ourselves. We have won countless times, and we need to win this time as well," Binance's chief marketing officer Yi He said in a message.
Several Binance executives have resigned from their posts lately, including the CEO of the US branch Brian Shroder.
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