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World's largest crypto exchange Binance sells Russian business

Crypto company Binance has opted to leave Russia as chaos ensues within the EU markets
Crypto company Binance has opted to leave Russia as chaos ensues within the EU markets Copyright Richard Drew/Copyright 2023 AP
Copyright Richard Drew/Copyright 2023 AP
By Daniel Harper
Published on Updated
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Binance is selling its Russian operations to CommEX marking a significant shift in the crypto landscape.

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Binance, the world's largest cryptocurrency exchange, has announced its exit from the Russian market, selling its business in the country to CommEX, a newly launched exchange. 

The move comes amidst increased scrutiny and regulatory challenges faced by Binance globally and growing concerns about compliance in the Russian market.

The buyer, CommEX, is described as a "community exchange" and had just launched its operations a day before the acquisition was announced. While CommEX's background remains relatively opaque, it is reportedly backed by top-tier crypto venture capitalists.

Binance revealed that it intends to cease all exchange services and business operations in Russia over the coming months. 

While the financial details of the deal remain undisclosed, Binance clarified that it will not retain any ongoing revenue shares from the sale or have any buyback options, setting it apart from similar deals involving international companies in Russia.

The decision to exit Russia aligns with Binance's compliance strategy, according to Noah Perlman, the group's Chief Compliance Officer.

Notably, this move follows reports of the US Justice Department investigating Binance for potential violations of war-related sanctions on Moscow, although the company did not explicitly reference this in its statement.

Yet another company leaves Russia

Binance assured its Russian clients that their assets were securely protected during the transition process, which is expected to take up to a year. Users of Binance's in-house coin, BNB, were also informed that they would enjoy a 25% trading fee discount on CommEX.

The sale of Binance's Russian operations marks another withdrawal of a Western company from Russia in response to geopolitical tensions, as numerous firms have been reassessing their positions and divesting assets in the region due to sanctions and geopolitical concerns.

It remains to be seen how this move will impact Binance's global standing and market share, given the ongoing regulatory challenges and legal actions the exchange faces in various jurisdictions worldwide.

 Nonetheless, Binance maintains its position as the largest crypto exchange globally, despite these challenges and its exit from the Russian market.

Bigger fish to fry

Faced with the unexpected termination of its partnership with Paysafe, a multinational online payments company that facilitates deposits and withdrawals through bank transfers, Binance has unveiled a series of significant changes set to impact its European users. 

In a press release issued on Thursday, Binance made its stance clear regarding the matter. "Given that Paysafe has unilaterally decided to stop processing deposits in euros for Binance users, Paysafe users are advised to take appropriate measures in advance," warned the exchange.

Binance has issued a directive to its users, urging them to convert their euro balances into the stablecoin USDT before the looming deadline of October 31.

Frustration among users

Starting from Thursday, users will no longer have the ability to purchase cryptocurrencies with euros or sell cryptocurrencies for euro balances.

Binance sought to reassure its user base, stating, "Please be assured that all funds are secure, and all other crypto-related services are not affected." It is important to recall that Binance had previously announced the impending end of its partnership with Paysafe,

While grappling with the fallout from Paysafe's decision, Binance also finds itself amid mounting regulatory challenges. Following the collapse of the US-based exchange FTX, Binance has remained under constant regulatory scrutiny with the US Securities and Exchange Commission (SEC) initiating legal action against Binance in June 2023.

Despite the deluge of negative news, the price of Binance Coin (BNB) has managed to weather the storm relatively well in recent months with BNB trading at $211.

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