Binance curbs services to Russian accounts to comply with EU sanctions

21 Apr 2022

Image: © murmakova/Stock.adobe.com

Binance said it is following the latest EU sanctions against Russia and believes all other major cryptocurrency exchanges ‘must follow the same rules soon’.

Cryptocurrency exchange Binance is limiting services for Russian users in order to comply with the recent wave of EU sanctions.

Binance said that Russian nationals, people living in Russia and any companies based in the country that hold crypto assets worth more than €10,000 will be banned from making deposits or trading on the platform.

Future Human

Accounts that come under these classifications will be put into withdrawal-only mode and deposits sent to Russian accounts with more than €10,000 will also be restricted.

The restrictions will not apply to any Russia-linked account with less than €10,000 in crypto value.

“The limit also covers all spot, futures, custody wallets, and staked and earned deposits,” Binance said in a statement today (21 April).

The world’s largest cryptocurrency exchange by trading volume added that Russian accounts with more than €10,000 in value that have open futures or derivatives positions will be given 90 days to close out their position. No new positions will be allowed for these affected accounts.

“While these measures are potentially restrictive to normal Russian citizens, Binance must continue to lead the industry in implementing these sanctions,” it said. “We believe all other major exchanges must follow the same rules soon.”

Earlier this month, the EU issued a fifth round of sanctions against Russia in relation to its invasion of Ukraine. This included a ban on providing high-value crypto services to Russia in a bid to “close potential loopholes”.

There have been concerns that Russians could use crypto to avoid sanctions imposed on the country by the EU, US and other nations.

At the beginning of March, the US Treasury warned against US-based exchanges facilitating “deceptive or structured transactions or dealings to circumvent any United States sanctions, including the use of digital currencies or assets or the use of physical assets”.

At that time, Binance said it would not “unilaterally” freeze the accounts of all Russian users. A spokesperson for the exchange told CNBC that crypto is “meant to provide greater financial freedom for people across the globe” and a blanket ban would “fly in the face of the reason why crypto exists”.

Yesterday (20 April) the US Treasury put sanctions on crypto mining company BitRiver for its role in the evasion of sanctions on Russia. The company was part of a long list of Russian individuals and entities sanctioned, including commercial bank Transkapitalbank and a global network led by oligarch Konstantin Malofeyev.

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Leigh Mc Gowran is a journalist with Silicon Republic

editorial@siliconrepublic.com