Binance Ends Relationship with Sanctioned Russian Banks
Binance, a prominent cryptocurrency exchange, has severed ties with five Russian banks that are under sanctions. The exchange received criticism for offering these banks as transfer options, as it raised concerns about potential sanctions violations. The US Justice Department is currently investigating Binance for possible breaches, alleging unauthorized access for Russian citizens. The Wall Street Journal reported on Binance’s involvement in peer-to-peer ruble-to-digital asset transactions, particularly with banks under Western sanctions. However, Binance denied any affiliation with Russian banks, stating that it follows global sanctions rules. Binance has removed these banks from its payment methods, but they have resurfaced using coded terms. According to Binance, the removal was a response to users bypassing sanctions.
Binance’s Legal Challenges and Russian Cryptocurrency Circumvention
Binance has faced various legal hurdles, including a lawsuit filed by the US Securities and Exchange Commission for alleged failure to comply with securities laws. The exchange’s involvement in aiding Russians in transferring funds overseas has put it in a complex legal predicament. Russian banks such as Tinkoff and Rosbank are under sanctions imposed by the European Council and the United States. These sanctions prohibit ruble transfers from Russian entities to foreign bank accounts or for currency conversion. To circumvent the sanctions, Russian citizens have turned to cryptocurrencies, with Binance being a preferred choice for such transactions. The Wall Street Journal reported that Binance facilitated trades totaling $428 million per month in the region.
Hot Take
Binance’s decision to end its relationship with sanctioned Russian banks is a step towards compliance with global sanctions rules. However, the fact that these banks resurfaced using coded terms raises questions about the effectiveness of such measures. Binance’s legal challenges highlight the complexities of operating in the cryptocurrency space, particularly when it comes to international sanctions. The use of cryptocurrencies to circumvent sanctions is a concerning trend, and regulators will need to address this issue to ensure effective enforcement of sanctions.
By
By
By