Cryptocurrency exchange Binance is evaluating several options for its Russian operations, including fully withdrawing from the country, the Wall Street Journal reported. The news comes at a time when Binance is already facing regulatory pressure from the U.S. Securities and Exchange Commission (SEC) and others in various matters.
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“All options are on the table, including a full exit,” a Binance spokesperson told the media outlet.
Binance’s Russian Operations Under Scrutiny
On August 22, a Wall Street Journal report revealed that Binance is enabling Russians to move money abroad. The crypto giant founded by Changpeng Zhao claimed that it had stopped working in Russia and was abiding by all Western sanctions. However, as per the report, the crypto exchange continued to handle significant trading volumes in Rubles.
Further, the report alleged that Binance allowed peer-to-peer trading with the help of sanctioned Russian banks, including Rosbank and Tinkoff Bank. In reaction, Binance removed various sanctioned banks from its peer-to-peer crypto trading service, saying that it regularly updates its systems to ensure regulatory compliance by addressing gaps that are pointed out to it.
However, a subsequent Wall Street Journal report on August 25 noted that several traders in Binance’s official Telegram chat group for Russian clients said that they still could use sanctioned banks through other available payment options by manually inputting their Rosbank or Tinkoff Bank details. A Binance spokesperson said that the platform was aware of efforts to “circumvent” its controls and that it was taking actions to ensure that strong controls are in place.
Binance’s transactions in Russia could add to its legal woes in the U.S., where it has already been sued by the SEC and the U.S. Commodity Futures Trading Commission (CFTC). The SEC accused Binance and its founder Zhao of misusing customers’ funds and diverting them to a trading entity controlled by Zhao. Meanwhile, the CFTC alleged that Binance was operating an illegal exchange and a “sham” compliance program.
Additionally, in May, Bloomberg reported that the U.S. Department of Justice (DOJ) is conducting an investigation into the illegal use of the Binance exchange by Russians for moving money in violation of U.S. sanctions. The DOJ has also been investigating Binance for potential money laundering activities.
Amid all these regulatory issues, BNB-USD, Binance’s native token is down 11% year-to-date.
