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Binance exits Russia with sale of operations to CommEX

Sep 27, 2023
Illustration of a crypto coin against the Russian flag.

Illustration: Shoshana Gordon/Axios

Binance is selling its Russia business and exiting the market amid increased regulatory scrutiny.

Why it matters: Leaving Russia alleviates some legal pressure for Binance, but the exchange still faces plenty of regulatory hurdles elsewhere.

Driving the news: Binance announced that it had entered into an agreement to sell its Russia operations to CommEX, a newly launched crypto exchange in that market.

  • Financial terms were not disclosed, but Binance emphasized there will be no ongoing revenue split from the sale, and it won't have any option to buy back shares in the business.
  • The offboarding process could take up to a year as it migrates users and their assets to the CommEX platform, it said.

Flashback: Binance's Russia business had become a headache for the company, as it faced legal risks associated with its operations there.

  • In May, Bloomberg reported the U.S. Department of Justice was investigating Binance for potentially allowing Russians to skirt U.S. sanctions and move money through its exchange.
  • More recently, the Wall Street Journal reported the exchange was continuing to help some Russians move money abroad.
  • Soon after, Binance moved to limit some peer-to-peer trading and said it was considering an exit from the market.

Zoom out: Binance's troubles aren't limited to Russia.

  • TThe CFTC filed a civil case against it in March, alleging that the exchange didn't try to prevent U.S. citizens from using its financial derivatives products.
  • In June, the SEC sued Binance and founder Changpeng Zhao, alleging market manipulation, securities law violations and fraud.

The intrigue: CommEX officially launched Tuesday, and little is known about the fledgling exchange.

  • In its launch post, CommEX said it will provide its users with spot, futures, and peer-to-peer trading.

What they're saying: "As we look toward the future, we recognize that operating in Russia is not compatible with Binance's compliance strategy," Noah Perlman, Binance's chief compliance officer, wrote in a statement.

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