Report: Binance deals with five backlisted Russian banks
Binance is allegedly facilitating transfers to and from at least five Russian banks that have been blacklisted by Western powers following Russia’s invasion of Ukraine last year.
According to the Wall Street Journal, Binance allows its customers to use these five banks, which include Rosbank and Tinkoff Bank, to process payments for peer-to-peer transactions. In such transactions, customers directly buy and sell cryptocurrencies from one another, bypassing the exchange’s crypto pool or market makers.
The report also indicates that Russians engaged in peer-to-peer transactions totaling around $428 million monthly from October to March, as reported by Russia’s central bank.
“Binance Angels,” who are volunteers from Binance, informed users via Telegram that the exchange is not enforcing trading limits on its Russian clients, despite having previously announced such restrictions in April 2022 to comply with EU sanctions. However, there has been no official statement from Binance on the matter.
“We have no relationship with any banks whatsoever, in Russia or elsewhere, in relation to our P2P program,” a company spokesperson said in a statement to Fortune. “Binance follows the global sanctions rules and enforces sanctions on people, organizations, entities, and countries that have been blacklisted by the international community, denying such actors access to the Binance platform.”
The report is likely to add another layer of complexity to Binance’s legal problems in the U.S. and its already strained relationship with regulators.
The US Department of Justice’s national security division is investigating whether Binance or its executives violated US sanctions related to Russia’s annexation of Crimea and interference in Ukraine. This probe is separate from an ongoing inquiry by the DOJ’s criminal division into Binance’s compliance with anti-money laundering and tax laws.
The move came shortly after Binance reportedly eased restrictions on Russian citizens and residents that it had imposed over a year ago, breaking ranks with mainstream finance and global regulators in a decision that weakens Western attempts to isolate Moscow.
Complying with the latest EU sanctions targeting Russia, Binance started to restrict or terminate services for Russian accounts back in Mach 2022. The move followed the adoption of new European penalties in response to Russia’s military escalation in Ukraine. However, the influential crypto ecosystem now accepts deposits in Russian rubles, euros, British pounds, and other currencies using bank cards issued in Russia.
Binance told users that Russian nationals and people living in the country, as well as companies based there, are not allowed to trade on its P2P marketplace using US dollar or euro. EU-based traders were also prohibited to transact in Russian rubles.
Accounts for Russia-linked users that have completed address checks and hold crypto worth less than 10,000 euros can choose other available fiat currencies.