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Binance, the world’s largest cryptocurrency exchange, is exiting Russia, selling its operations in the country to an exchange it launched just a day ago.
Binance said on Wednesday that it intends to cease all trading services and business operations in the country in the coming months and will sell assets to CommEX for an undisclosed amount.
After this, it will not retain any share of ongoing revenue from the sale and will not have any buyback options, “unlike similar transactions with Russian International Corporation,” it added.
Two months ago, the exchange denied media reports that it helped clients move funds held by sanctioned Russian banks out of the country.
“Going forward, we recognize that conducting business in Russia is incompatible with Binance’s compliance strategy,” said Noah Perlman, the group’s chief compliance officer.
The asset has been acquired by CommEX, which launched on Tuesday. Its website has few details about its background but says it is backed by an unnamed “top cryptocurrency venture capital investor.”
Cryptocurrency exchanges like Binance have become the main means of moving money back and forth for hundreds of thousands of Russians who left the country after the invasion of Ukraine, many of whom still work for Russian companies or rent properties there. Many Russian banks have been cut off from the international payment system.
Unlike some U.S. platforms, Binance has only introduced minor restrictions for its Russian customers, including banning direct transactions to convert rubles into dollars or euros, but allowing them to use the exchange freely. In April, the company lifted a one-year-old limit on assets worth 10,000 euros in the accounts of Russians.
Binance founder Changpeng Zhao said that holders of the exchange’s internal token BNB will “enjoy a 25% discount on trading fees” on CommEX. Binance said that it will take up to a year to transfer Russian Binance users to the new location and that “all assets of existing Russian users are protected safely and reliably.”
The opaque nature of the buyer has sparked speculation within the Russian crypto community about who might be behind it.
Despite regulatory investigations into the exchange and its owners and a decline in market share, Binance remains the world’s largest cryptocurrency exchange.
The company is facing a lawsuit from the largest U.S. market regulator, accusing it of illegally accessing U.S. customers, violating securities laws and commingling billions of dollars of customer cash through separate entities owned by Zhao.
The company had previously described the CFTC lawsuit as “unexpected and disappointing.” The company said it was disappointed and frustrated by a separate lawsuit filed by the Securities and Exchange Commission, which its U.S. affiliate called “meritless” and pledged to defend itself against the two regulators’ lawsuit.
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