Crypto News

Binance Suspends P2P Services in Russia Amid Sanctions

Binance, the world’s largest cryptocurrency exchange by trading volume, has stopped offering its peer-to-peer (P2P) services in Russia to customers who use five banks that are under Western sanctions. The move comes amid increasing regulatory scrutiny and legal challenges for the crypto platform in several countries.

Binance Drops Sanctioned Banks from P2P Platform

According to a report by the Wall Street Journal, Binance has removed the option to pay with rubles through five Russian banks that are facing sanctions by the US and the EU over Russia’s involvement in the Ukraine conflict. The banks are Rosbank, Tinkoff, Promsvyazbank, Gazprombank and VTB.

Binance’s P2P platform allows users to buy and sell cryptocurrencies directly with each other, using local currencies and payment methods. The platform was one of the few ways for Russians to transfer funds in and out of the country, as many banks have been cut off from the international payment system SWIFT due to the sanctions.

The Wall Street Journal also reported that Binance was helping Russians to move their money abroad, circumventing the heavily sanctioned banking system. The report cited an anonymous source who claimed to have used Binance’s P2P platform to transfer $100,000 to a bank account in Latvia.

Binance Suspends P2P Services in Russia

Binance did not confirm or deny the allegations, but said that it regularly updates its systems to ensure compliance with local and global regulatory standards. A spokesperson for the exchange told media outlets that when gaps are pointed out to them, they seek to address and remediate them as soon as possible.

“In line with our ongoing commitments, payment methods on the Binance P2P platform that do not fit with our compliance policies are not available on our platform,” the spokesperson said.

Binance Faces Regulatory Pressure Worldwide

Binance’s decision to suspend its P2P services in Russia is not the first time that the exchange has faced regulatory pressure in the country. In October 2020, Binance was added to a list of prohibited websites by the Russian telecom regulator Roskomnadzor, although the exchange continued to operate normally.

Binance is also facing legal challenges in other jurisdictions, such as the US, where it is being sued by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for allegedly violating securities laws and facilitating money laundering. The exchange’s CEO, Changpeng Zhao, is also named as a defendant in the lawsuits.

In addition, Binance has been banned or warned by regulators in several countries, including the UK, Japan, Germany, Italy, Singapore and Hong Kong, for operating without proper licenses or authorizations. The exchange has been accused of offering risky products and services to retail investors, such as leveraged trading, futures contracts and tokenized stocks.

Binance has responded to the regulatory backlash by saying that it is committed to complying with local laws and regulations wherever it operates. The exchange has also hired former regulators and industry veterans to strengthen its compliance and legal teams.

Binance Not Alone in Offering Services to Russians

Binance is not the only crypto exchange that has offered services to Russians through sanctioned banks. ByBit, another popular crypto platform, also allowed Russians to purchase cryptocurrencies using cards issued by the sanctioned banks on its P2P platform.

However, ByBit also terminated its services with the sanctioned banks after being contacted by the Wall Street Journal. A spokesperson for ByBit said that they were unaware of the sanctions and that they have a zero-tolerance policy for any illegal activities on their platform.

ByBit also said that it does not have a physical presence or a legal entity in Russia and that it does not target Russian customers specifically. The spokesperson added that ByBit follows strict KYC (know your customer) and AML (anti-money laundering) policies and cooperates with law enforcement agencies when required.

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