Binance Maintains Compliance with EU Sanctions Despite Lifting Restrictions for Russian Users

On Apr 27, 2023

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Binance, the world’s leading cryptocurrency exchange, has recently made some noteworthy changes in its policies regarding Russian citizens and residents.

Binance had earlier imposed certain restrictions on Russian users in response to the sanctions imposed on Russia by the European Union. However, in a recent development, the exchange has lifted these restrictions and allowed Russian users to deposit funds using their bank cards issued in the country.

Binance Lifts Restrictions on Russian Users

Earlier in March 2022, Binance had announced that it would not support deposits from Visa and Mastercard cards issued in Russia. Additionally, it had also stated that it would not accept any Visa and Mastercard deposits made from the country.

With the latest changes in its policies, Binance has allowed users to deposit various currencies, including Russian rubles, euros, British pounds, and more, from their bank cards issued in Russia.

The prohibition on Russian bank cards was imposed last year, in response to the sanctions levied against Russia by the European Union and the United States following their invasion of Ukraine. In spring of the following year, the EU further extended its sanctions to include a ban on crypto services that catered to Russian users with balances exceeding 10,000 euros.

In the fall, that threshold was eliminated, making it impossible for Russian citizens and residents to use any crypto service registered in the EU. LocalBitcoins, Crypto.com, and Blockchain.com immediately notified Russian users that their accounts would soon be discontinued.

Binance had announced the 10,000-euro limit for users inside Russia, stating that the EU’s fifth package of restrictive measures against Russia required the limitations.

According to reports from various media outlets, the previous restrictions that prohibited the use of Russian bank cards and limited the account balances of Russian users on Binance have been lifted, even though the sanctions remain in effect.

Last month, however, Binance prohibited peer-to-peer trades in dollars and euros for Russian citizens and residents, leaving only the Russian ruble option.

Binance Claims Compliance with EU Sanctions Against Russia

Despite removing certain limitations for Russian users, Binance maintains that it is fully compliant with the European Union’s sanctions against Russia.

According to a statement by a Binance representative via email, the exchange ensures that all current restrictions pertaining to sanctions against Russian nationals are upheld by the platform and its legal entities within the European Union.

In the face of recent changes, Binance still prohibits peer-to-peer trading in Russia, citing sanctions as the underlying reason. As a result, the exchange maintains a cautious approach towards ensuring regulatory compliance while simultaneously facilitating an optimal trading experience for its users.

Ever since the beginning of the invasion, Russia has been exploring options to leverage digital currencies as a means to bypass sanctions.

As per recent reports, the Governor of the Bank of Russia announced that the country is in the process of drafting legislation that would enable cryptocurrency for international settlements. This move may provide a new way for Russia to avoid the financial restrictions imposed upon it by the European Union and the United States.

The Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance in March, alleging that the platform had been operating an illegal derivatives exchange. The lawsuit is yet another instance of the regulatory hurdles that Binance has been encountering in different countries worldwide.

These issues are prompting the exchange to adopt more compliance measures to address regulatory concerns and enhance its reputation as a reliable and compliant cryptocurrency platform.

Binance’s recent decision to lift certain restrictions on Russian users could potentially influence other cryptocurrency exchanges to change their policies as well. However, this move may also lead to further tensions between Binance and regulatory bodies in the US and EU.

As geopolitical tensions continue to rise, the crypto community will be closely watching the effectiveness of these sanctions and the response of Russian authorities and their counterparts around the world.

Binance Cancels $1.3 Billion Voyager Deal Amidst Regulatory Concerns

On Tuesday, Voyager Digital, a crypto lender that went bankrupt, revealed that Binance.US had canceled the agreement to acquire the lender’s assets valued at $1.3 billion.

Although being approved by the vast majority of Voyager creditors and bankruptcy judge Michael Wiles, Binance.US terminated the deal due to the “hostile and uncertain regulatory climate in the United States,” which it claims has created an unstable operating environment for the entire American business community.

Lawyers for the U.S. government, including the Securities and Exchange Commission, sought to block the deal, arguing that some of the assets involved in the transaction could constitute unregistered securities.

Despite concerns about the contract’s fine print pardoning breaches of tax or securities law, a substantive part of the $1 billion deal was allowed to proceed by the U.S. government in an April 20 filing.

The committee responsible for representing Voyager creditors during the bankruptcy proceedings expressed their deep disappointment through a tweet and stated that they are currently exploring possible claims against Binance.US.

Voyager has now initiated the Chapter 11 process, wherein it will be disbursing cash and cryptocurrency directly to its customers. The company has also stated that it will provide additional information about this process to its customers in the near future.

Voyager’s bankruptcy last summer was due to the “crypto winter,” which left the company unable to honor withdrawals from its users. FTX initially won the bid for the company, but subsequently collapsed, making the sale process difficult from the start.

With Binance.US’s withdrawal from the agreement, Voyager will move forward with its Chapter 11 process, and Binance.US will be required to destroy any information it holds about Voyager customers.

The news of the termination of the agreement could be seen as a result of the regulatory climate in the US, and the crypto community is likely to closely monitor developments in this regard.