At the heart of a legal battle in the United States, Binance has found itself singled out by the Wall Street Journal for its alleged links to Russian banks under sanctions. This disclosure risked worsening the platform’s already tense situation. Yesterday, Binance announced that it has severed all ties with these institutions.
Binance withdraws five sanctioned Russian banks from P2P trading
With Binance already facing a US Department of Justice (DoJ) investigation and a tense US legal landscape, it now finds itself in the spotlight for its alleged involvement in controversial financial transactions with banks. Russians sanctioned by the United States.
The report, originally published by The Wall Street Journal on August 22, reveals that Binance allegedly continued to facilitate transactions involving nearly five Russian banks under US sanctions. These allegations have the potential to further deepen the legal chasm the company already finds itself in.
To distance itself from this perilous situation, Binance chose to sever ties with these banks. Yesterday the WSJ reported that the Exchange allegedly removed several sanctioned Russian banks from its peer-to-peer (P2P) trading service.
Binance’s peer-to-peer (P2P) trading service, which allowed users to transact directly with bank accounts, now no longer includes these sanctioned Russian banks among its payment options.
In a statement, Binance said: “ We regularly update our systems to ensure compliance with local and global regulatory standards. When shortcomings are reported to us, we seek to remedy them as soon as possible. (…) Payment methods that do not correspond to our compliance policies are not available on our platform.”
However, the controversy does not end there. Later reports suggest that Binance may have sought to hide the sanctioned status of certain banks by subtly renaming them. Russian media revealed that banking options such as Sberbank and Tinkoff were presented under more generic names to avoid raising suspicion.
Doors remain open to Russian users
The controversy surrounding Russian banks cannot be ignored, but it does not exclusively determine Binance’s image. Its P2P platform continues to support unsanctioned Russian banks, offering users a variety of payment methods, including non-bank transfers through payment processors such as Payeer and Advcash.
Additionally, the Wall Street Journal points out that Binance has gradually relaxed its exchange policies. In April 2022, the platform introduced a €10,000 limit for Russian accounts, however, in April 2023, the company lifted this policy.
The withdrawal of these five Russian banks marks a significant turning point in the company’s quest for compliance. As regulatory pressures escalate, Binance’s strategic choices take on enormous significance for the entire crypto industry.
In the current context where Binance is already facing various difficulties, including the liquidation scandal, it is important to avoid that this case of the sanctioned banks is added to the list.
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