The leading crypto exchange by transaction volume, Binance, has on Wednesday September 27, revealed it is exiting the Russian market. The announcement conveyed via its official blog post confirmed the full exit by selling the entire firm to the newly established crypto exchange CommEX.
The announcement was noncommittal on the financial details involved in the deal. Nonetheless, Binance ruled out a revenue split and buyback option. Instead, it is selling the Russian business entirely.
Binance Offers 12-Month Off-Boarding Process
The agreement between Binance and CommEX stated that the transition would involve a smooth process for the users utilizing the Russian platform. The statement read that the parties projected to undertake a 12-month off-boarding process.
Binance assured the safety of all existing assets claimed by the Russian users. Notably, it is committed to guaranteeing the safety of Russian business data and crypto assets.
Binance chief compliance executive Noah Perlman indicated that exiting Russia is necessitated by the recognition of divergent strategy and Russian operations. In particular, the compliance executive regretted that the Russian operation was incompatible with the rest of Binance’s strategy.
Perlman decried the incompatibility of Russian business by declaring optimism in the long-term viability of the web3 industry.
Binance would pursue growth in the Web3 sector by prioritizing resources and energy in the 100+ countries where it operates. It restated that it would offer an orderly process to migrate the users. Binance assured that it would cooperate with CommEX to assist the users in migrating assets to the newly established crypto exchange.
Binance to Redirect Compliant Customers to CommEX Exchange Platform
Binance indicated that it would oversee the user migration where a portion of the Russian users that satisfied the Know Your Customer (KYC) requirements are immediately directed to the CommEX platform. Nonetheless, Binance assured that it would gradually shutdown the Russian platform for a period estimated to take several months.
The Binance revealed in the Wednesday statement that it will deploy every effort towards guaranteeing a smooth user experience. In support, Binance chief executive Changpeng Zhao indicated that users holding the native token BNB will reap the 25% trading discount on the crypto exchange CommEX platform.
The Wednesday announcement confirmed that Binance is severing ties with the CommEX exchange upon its fully exit from Russia. Unlike past deals formulated by international companies, the compliance executive indicated that Binance entered into a unique sale agreement. As such, Zhao-led Binance will not pursue a revenue split. Also, it would not retain options to acquire back shares in the newly established crypto exchange business.
News of Binance fully exiting Russia comes 24 hours after CommEX announced its establishment on Tuesday September 26. CommEX involves a platform offering crypto trading services such as peer-to-peer trading, spot and futures.
CommEX utilizes a unique design apparent to target Russian users. Its interface only accommodates Russian and English languages.
Western Sanctions Force Binance Exit Critical Russia Market
The Wednesday announcement confirming Binance’s departure from Russia realizes its objective of a smooth transition. The crypto exchange had declared its intention to exit Russia. Binance has often cited the regulatory challenges arising from the need to comply with the economic sanctions imposed by Western nations.
A review of recent Binance activity shows that the Zhao-led crypto exchange had, in August 2023, actively promoted its service portfolio to Russian users. However, the top Russian executives began leaving the firm early in September.
The Western-imposed sanctions purely necessitate the exit from Russia since it constitutes a key market for Binance. A review of SimilarWeb data shows Russia as a critical market, as users account for 6.9% of total visits to Binance.com.
Binance Returns in Belgium Crypto Market
Binance’s exit from Russia comes hours after it announced reopening the registrations to Belgium users. The crypto exchange announced the return via a Monday, September 25 post on X (formerly Twitter).
Return to Belgium will allow the country’s crypto users access to services and products. It has been three months since the cease-to-operate crypto-related service order by Beligium’s Financial Services and Markets Authority. The regulator alleged that Binance violated the country’s anti-money laundering and antiterrorism laws.
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