Binance, the world’s largest cryptocurrency exchange in terms of transaction volume, has banned Russian nationals and residents from trading dollars and euros through its P2P service.
Binance implements new restrictions due to EU Sanctions
The decision was made in accordance with the tenth package of restrictive measures of the European Union against Russia. The exchange also banned EU citizens from buying and selling rubles via P2P, citing the same restrictions.
Binance’s P2P (peer-to-peer) service allows users to make transactions among themselves without the mediation of the exchange, on the terms determined by them.
The P2P services of Binance and other crypto exchanges were actively used by Russians in 2022 as a tool for transferring money abroad, after regular SWIFT transfers became difficult.
With the help of these services, users can transfer money from one crypto wallet to another or buy a cryptocurrency, such as the USDT stablecoin, tied to the value of the dollar for rubles.
The recent sanctions forbid Russian individuals and companies from using cryptocurrencies as Western regulators fear the virtual asset class provides a backdoor to circumvent sanctions.
As a result, the world’s largest crypto exchange blocked Russian nationals or residents from making new deposits or trading if they hold over 10,000 euros.
Affected clients were given 90 days to close their positions and withdraw funds. However, accounts for Russian nationals residing outside Russia that have a total value below the 10,000 EUR threshold and are verified with proof of address remain unaffected and active.
Struggle with compliance in the face of sanctions
Binance has also announced that it is suspending withdrawals and deposits for any new customers using British pounds, and the exchange plans to suspend all GBP transactions for all customers starting May 22.
The move comes after Binance’s banking partner in the UK, Paysafe, said it was abandoning cryptocurrency services for UK customers.
A Paysafe spokesperson said that it was “too challenging” to offer its embedded wallet cryptocurrency services to UK customers because of the regulatory atmosphere in the country.
Paysafe is based in London and said this decision was “taken in an abundance of caution.” Paysafe did not clarify whether it was abandoning crypto altogether or just in its partnership with Binance.
Binance is reportedly working to find an alternative solution to allow customers to trade GBP for crypto again. The exchange had initially rejected calls for a blanket ban on all Russian users to stop their platforms from being used as a way around Western sanctions.
Ultimately, however, it had to comply with sanctions as US and European regulators said that diverging from mainstream finance would weaken their attempts to isolate Moscow.
