Cryptocurrency exchange Binance said on Wednesday it would sell its Russia business to newly-launched exchange CommEX, becoming the latest company to pull out of Moscow since the country began its war against Ukraine. Binance, the world’s largest cryptocurrency exchange, did not disclose the deal’s financial details. The company said it will have no ongoing revenue split from the sale, nor will it maintain an option to buy back shares in the business. Binance also reassured existing Russian users that their assets are safe and will be transferred to CommEX in an “orderly” process that will take up to a year.
The move comes amid mounting concerns that Russians use cryptocurrencies to skirt sanctions against their country. Regulators in the US and elsewhere have been urging companies, including exchanges like Binance, to tighten controls over transactions to prevent them from being used for illegal activities such as money laundering and financing terrorism. The Justice Department is investigating whether Binance was used to help Russians circumvent US sanctions, Bloomberg News reported on Tuesday.
The company said in a press release that Binance will shut down its operations in the country and sunset all exchange services and business lines in Russia over the next several months. It will partner with CommEX to notify its existing Russian users and ensure they can migrate their assets to the new exchange.
Founder and CEO Changpeng Zhao said the decision to exit Russia was not easy, but it aligns with the firm’s commitment to compliance with sanctions. He told CNN’s Richard Quest that he is confident the sale will be an orderly and smooth transition, adding that all users with completed KYC checks will have their assets moved to CommEX.
CommEX is a centralized exchange backed by crypto venture capitalists that recently launched its platform. PYMNTS has contacted the company for comment, but it has yet to respond. Binance’s exit from Russia follows a growing trend among Western companies to sell or hand over their assets in the country, in part as a way of complying with sanctions against Moscow and addressing threats by the Kremlin to seize foreign-owned property. Some examples include Renault, Shell, and McDonald’s.
In the interview with Quest, Zhao also talked about why he believes there is no such thing as anonymous crypto trading and that government officials should seek to enforce laws that would make it more difficult for sanctioned individuals or companies to use cryptocurrencies to evade restrictions against them. Click for the full interview. It will air Sunday on CNN International and the Global edition of HLN. Learning more about how PYMNTS analyzes the most exciting payments and digital currency stories daily is interesting. Sign up for our newsletter here. It’s free, and you can unsubscribe at any time. You can also follow us on Twitter and LinkedIn. Thank you!