Binance stops trading in Russia

Binance breaks its ties with Russia. The world's largest crypto exchange is suspending its P2P service in US dollars, euros, and rubles.

Binance breaks its ties with Russia. The world's largest crypto exchange is suspending its P2P service in US dollars, euros, and rubles.

A year after the invasion of Ukraine, the European Union approved its tenth sanctions package against Russia. As a result of the measures, Binance is now stopping trading on the Russian market entirely. This reports Forbes Russia and it is based on statements from a company spokesman.

According to the statement, the world's largest crypto exchange by trading volume bans Russian customers from buying and selling US dollars and euros through its peer-to-peer (P2P) service. In return, EU citizens are not allowed to execute P2P transactions in rubles through the platform. With the service, users can essentially transfer value directly without Binance acting as an intermediary.

The measures mainly affect arbitrage traders and users who use the P2P platform as an alternative to SWIFT transfers, Alexey Zyuzin told Forbes. All other users should be less affected by the sanctions, added the founder of advisory Crypto Holding. The last time Binance restricted Russian users was in April of last year.

Are the sanctions against Russia working?

Shortly after the war began, the EU unleashed a full-blown sanctions barrage against Russia. The import of gas and oil was halted, Russian banks were cut off from the international messaging system for financial transactions (SWIFT), and oligarchs' assets were frozen. The aim was to bring the country’s economy to its knees.

The measures, however, don’t seem to have achieved that goal. After a drop in economic output last year, the IMF now forecasts growth of 0.2% for 2023.

The Kremlin is sidestepping sanctions by using the Chinese payment network CIPS for its transactions, and the intricate financial structures of many Russian oligarchs make it hard for authorities to seize assets.

Kremlin plans its own crypto exchange

Additionally comes the use of blockchain technology, which Russia is studying to circumvent sanctions. With the pilot project "CELLS," the Kremlin is building a SWIFT alternative based on DLT and is simultaneously pushing ahead with the development of a own digital central bank currency.

And the Kremlin is also giving a clear response to sanctions from the crypto sector. The State Duma responded last November to restrictions on a number of exchanges and brokers with plans for a national crypto exchange. However, it remains unclear when the implementation will begin.