Binance, the world's largest cryptocurrency exchange, has announced its exit from the Russian market by selling its business to CommEX, a cryptocurrency exchange that officially launched on Tuesday. The move is part of Binance's compliance strategy, as it acknowledges that operating in Russia is not compatible with its approach to regulatory compliance. However, financial terms of the deal were not disclosed.
Binance has been under investigation by the US Justice Department regarding potential illegal use of the exchange to help Russians evade sanctions and move funds. The investigation also explores whether Binance or its executives violated sanctions related to Russia's invasion of Ukraine. This announcement follows the departure of two senior executives from Binance's Russia business, adding to a series of high-level departures from the exchange.
Binance and its founder, Changpeng "CZ" Zhao, have faced increasing regulatory scrutiny over the past year, with lawsuits filed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Despite having over 150 million registered users worldwide, Binance's market share has dwindled since the CFTC's lawsuit in March.
In Russia, cryptocurrency payments and digital asset exchanges are prohibited, but citizens and companies are allowed to use offshore cryptocurrency platforms for fund transfers abroad and receipts from abroad.
CommEX, the cryptocurrency exchange that acquired Binance's Russia business, launched on Thursday. The exchange is part of CommEX Holding, based in the Seychelles, and operates under Hong Kong law as its governing rules. It is restricted from offering services in the US, most EU countries, and various nations and territories, including Singapore, Iran, Cuba, Syria, North Korea, and Crimea, according to its terms of service.
Binance clarified that neither the exchange nor its executives have shares or profit-sharing with CommEX. To facilitate a smooth transition for existing Russian users, Binance will conduct an off-boarding process lasting up to one year and will not retain an option to repurchase shares in the Russian business.
By fLEXI tEAM