Binance Closes Several Accounts Linked to Senior Russian Officials

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In Brief
  • On Thursday, Binance revealed it closed the accounts tied to senior Russian officials.

  • Kirill Malofeev, the son of Konstantin Malofeev, also had his account permanently closed.

  • Earlier this month, Binance introduced additional restrictions in the fifth round of E.U. sanctions against Russia.

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On Thursday, Binance announced it closed several accounts associated with relatives of senior Russian officials.

These individuals include Polina Kovaleva, the stepdaughter of Foreign Minister Sergei Lavrov, as well as the daughter of President Vladimir Putin’s spokesman Dmitry Peskov, and Elizaveta Peskova.

Binance revealed that Kirill Malofeev, the son of Konstantin Malofeev, a Russian oligarch who was previously indicted by the U.S. Department of Justice for violating U.S. sanctions, was also recently blocked. According to reports, Malofeev’s son allegedly funded the promotion of Russian separatism in Crimea.

In a tweet, Ukraine’s minister of digital transformation Mykhailo Fedorov said that “everyone connected with Putin’s regime will feel the consequences of war.”

Binance and its ‘proactive’ compliance

The actions taken by Binance come as part of a wave of international sanctions in response to Russia’s February invasion of Ukraine. According to the firm’s Vancouver-based global head of sanctions Chagri Poyraz, the exchange is continually assessing those using its services to see if any are associated with sanctioned individuals.

“What’s different is that our compliance screen operations are ‘proactive,’ aiming to detect and deter financial crime risk before any regulatory or legal action towards these individuals or entities,” the former compliance officer at HSBC Holdings Plc. said.

Poyraz also noted that the exchange had blocked the virtual currency exchange Garantex on March 11, several weeks before the U.S. Treasury’s Office of Foreign Assets Control sanctioned the platform. 

After attempting to use the exchange through a third-party brokerage, Peskova had been blocked on March 3, a week before being sanctioned by the U.S. Treasury Department.

Kovaleva was blocked by Binance the same day she was sanctioned by the U.K., on March 24. Malofeev’s Binance accounts were blocked this week, following his designation by the U.S. Treasury on April 20. 

Limiting Russian services

Earlier this month, Binance introduced restrictions for Russian nationals in compliance with the fifth round of EU sanctions against Russia.

According to an announcement on its website, the exchange limited services for “Russian nationals or natural persons residing in Russia, or legal entities established in Russia,” with crypto assets over €10,000 ($10,542 USD).

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.

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