Binance, the biggest cryptocurrency exchange measured by trade volumes, is suspected of doing business with sanctioned Russian organizations.
Binance in the spotlight
According to a story published by the WSJ on the 22nd of August, despite Binance’s claims of compliance and non-engagement with sanctioned businesses, the exchange allegedly continues to do business as usual in Russia. In April of 2022, Binance began restricting its activities in the Russian Federation.
Despite this, the WSJ analysis highlighted the significant volume of ruble-based cryptocurrency transactions compiled from outside sources. According to the allegations, customers of sanctioned banks in Russia may be able to deposit monies directly into their accounts by going through many levels of middlemen.
At the same time, it is believed that Binance continues to make the peer-to-peer (P2P) trading of rubles for cryptocurrency assets possible. It is said, with evidence including user screenshots and posts from official chat groups, that Binance coordinates with sanctioned banks to make this possibility a reality.
A recent investigation into the website that provides Binance’s services uncovered that the company offers its Russian customers access to payment processing via a minimum of five sanctioned financial institutions. Notable among them are Rosbank and Rinkoff Bank.
At the end of July, Rosbank published a report stating that the public P2P platform on Binance revealed that several hundred dealers were offering to purchase or sell rubles for USDT in transactions totaling approximately one million dollars.
The same source also revealed that in Binance’s official Telegram discussion group for Russian customers, hundreds of users have lately discussed the usage of Rosbank and Rinkoff Bank to perform P2P transactions via Binance. This information was gleaned from the same research.
These charges have been disputed by a representative for Binance, who has said unambiguously that the firm carefully complies with the existing legal frameworks.
Regarding its peer-to-peer (P2P) service, the spokesperson for Binance said, in their answer, that the company does not have any links with sanctioned banks in Russia or any other country.
Cash in digital form
These investigations are a response to sanctions imposed by the United States government on Russia’s financial sector, which, according to a report from February, targeted some Russian financial institutions, one of which being a prominent bank.
In August, Russia intends to conduct consumer trials of the digital ruble. This trial initiative has the potential to be a vital step towards upgrading its financial infrastructure, which would be a strategic countermeasure against the emergence of private coinage like Bitcoin.
Both Binance and CZ are being sued by the United States’ primary financial regulator, which has accused them of generating billions of dollars while “placing investors’ assets at significant risk.” The regulator is bringing the lawsuit in the United States.
In a court filing, the Securities and Exchange Commission (SEC) accused Binance of mixing “billions of dollars” in user money and covertly moving them to a different business owned by Binance’s founder and chief executive, Changpeng Zhao. Binance was accused of doing this by the SEC.
