Who’s more annoyed at Binance right now? Is it the Russians who have been effectively barred from trading on its platform or maybe it’s any graphic designer who would tell you not to make a company symbol look like a swastika, even accidentally? Perhaps it’s anyone who has been begging the crypto company to stop dealing with Russian President Vladimir Putin’s regime.
Citing new restrictions on Russia by the EU, the company announced Thursday, April 21 they were limiting the activities of Russians or Russian organizations with more than 10,000 euros in crypto assets (approximately $10,885). Accounts were restricted to withdrawal-only mode, meaning they can no longer deposit or trade. Bloomberg reported according to anonymous sources that there are 10 million Binance accounts in Russia, but only 50,000 have 10,000 euros in their accounts.
The change in policy comes just a day before Reuters dropped a massive report alleging that in 2021, the crypto trading platform had agreed to give Russian authorities client data for all those who donated to jailed Russian opposition leader Alexei Navalny. According to text messages and anonymous interviews with 10 people who Reuters said had knowledge of events, the crypto exchange was contacted by Rosfinmonitoring, the country’s financial intelligence police, who wanted Binance to hand over names and addresses for people who donated to Navalny.
Reuters also reported that the company’s leader of operations in Eastern Europe and Russia, Gleb Kostarev, agreed to show client data, according to the messages the outlet received.
Binance responded that it never had any contact with Russia regarding Navalny, but added that in seeking compliance in Russia, they must respond to “appropriate requests from regulators and law enforcement agencies.”
Binance told crypto news site The Block that it had not entered into any “unusual” agreement with Russia compared to other countries, and that “These obligations are ordinary and any traditional bank for example would be subject to the same requirements.” The crypto trading platform also told Reuters it regularly complies with police requests as per the rules in any country.
The company continued to do business with the country even after the invasion of Ukraine, saying that restricting innocent Russians from the platform would be “unethical.” The EU’s fifth and latest round of sanctions against Russia included a prohibition on “providing high-value crypto asset services to Russia.” Those new regulations came out April 8, two weeks before Reuters report.
Binance was doing quite well in Russia after the war began, after sanctions from western nations restricted use of the Ruble in overseas markets. Reuters pointed to data from research site CryptoCompare showing the number of transactions spiked in late February through March 15 to protect their money from the ruble’s fast devaluation. Binance was reportedly responsible for 77% of trades of crypto for Russians in March.
Despite the mess, Binance isn’t the only one drawing the ire of both governments and crypto enthusiasts. Other crypto companies are also in hot water because of their dealings with Russia after the start of their invasion of Ukraine.