Wednesday, the global leading crypto exchange Binance announced that it will sell its Russia business to the newly-launched crypto exchange CommEX, becoming the latest company to pull out of Moscow since Russia’s invasion of Ukraine.
The largest crypto exchange in the world did not disclose the financial details of the deal. The company stated that there will be no ongoing revenue division from the sale, nor will there be an option to repurchase business shares.
Binance gives up its position in Russia
Reports have it that Binance has withdrawn its services from Russia and transferred its business to CommEX. Binance’s Chief Compliance Officer, Noah Perlman, stated:
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
According to the announcement, the off-boarding process will take up to a year to assure a smooth transition for existing Russian users. Binance noted that “all assets of existing Russian users are safe and securely protected.”
Binance will provide its consumers with an orderly user migration procedure. Binance, in partnership with CommEX, will inform users on how to migrate their assets to the newly created exchange.
A subset of Russian users who have passed Know Your Customer checks will be redirected to CommEX upon completion of the user migration procedure. Over the course of the next few months, Binance will phase out its Russian platform. The crypto exchange noted in a statement that:
Every effort will be made to maintain a smooth user experience during this transition.
Binance
The CEO of Binance, Changpeng Zhao, also mentioned that BNB token holders will “continue to enjoy” a 25% trading discount on CommEX.
CommEX is a centralized cryptocurrency exchange supported by crypto venture capitalists, according to its website. Tuesday marked the debut of the company’s exchange.
CommEX stated that it will not accept consumers from the United States, the European Union, and other regions.
Many Western companies, including Renault, Shell, McDonald’s, and others, have agreed to sell their Russian assets or hand them over to local managers in order to comply with sanctions over the war in Ukraine and to deal with the Kremlin’s threats to seize foreign-owned assets.
Leaving Russia has been a troubling decision
Binance has been preparing its exit from Russia for some time, as the exchange has been confronted with significant regulatory obstacles relating to compliance with Western sanctions against Russia. In August 2023, despite regulatory duress, Binance continued to promote its services to Russian users.
According to previous reports, Russia is one of Binance’s largest markets. According to data from SimilarWeb, Russia is the leading market for user visits to the Binance.com website, accounting for 6.93% of all visits at the time of writing.
Earlier this year, it was reported that the Department of Justice was investigating whether Russian consumers were able to access the cryptocurrency exchange in violation of U.S. sanctions related to Russia’s invasion of Ukraine. To that end, the company announced in August that it was severing ties with sanctioned Russian banks.
Top Execs walked away earlier
The exchange’s senior Russian executives eventually left the company in early September. Gleb Kostarev, director of Eastern Europe and Russia at Binance, announced his departure via Facebook on September 6.
He added that he would be resigning from his position as vice president for Eastern Europe, the Commonwealth of Independent States (CIS), Turkey, Australia, and New Zealand. He also resigned from his position in the Asia-Pacific region “a few months ago,” the executive noted.
Additionally, Vladimir Smerkis, general manager for Russia and CIS at Binance, disclosed his departure via Facebook. “Almost two years have passed in the blink of an eye, and as of tomorrow, I no longer work at Binance,” the exec wrote.
None of the executives provided a straightforward explanation for their departures from Binance. In the announcement, Smerkis promised to provide additional information regarding the reasons for the departure, as well as the future and experience, at an upcoming online or even offline meeting in Moscow.
