Crypto exchange Deribit is banning Russian nationals and residents due to new EU sanctions. Although the exchange is based in Dubai, its Dutch parent company requires compliance with EU economic restrictions.
Russians make up the second-largest demographic on the exchange, but several competitors are more popular within the country. These sanctions may actually harm Deribit more than Russia’s crypto community.
Deribit To Exit Russia
According to TASS, the crypto derivatives exchange Deribit is completely withdrawing from Russia. This is due to new EU sanctions placed on Russia, but this also leaves a few exceptions.
For example, if a Russian-born person has citizenship or a permanent residence within the European Economic Area, they can continue. All Russian firms, however, are banned.
“Due to EU sanctions against Russia, Deribit is no longer able to accept Russian nationals and Russian residents as its clients, unless an exception applies. Since Deribit’s parent company is Dutch, these EU sanctions are relevant to us,” Deribit claimed in a statement.
Sanctions have become a defining part of Russia’s cryptocurrency ecosystem. Digital assets have seen wide adoption in Russia due to their ability to bypass sanctions, and government officials even espoused this practice at last year’s BRICS Summit.
However, the US Treasury is aware of the practice and keeps piling sanctions on the industry. Deribit continued to operate in Russia despite US sanctions, but new ones from the EU changed the equation.
Over the years, the exchange has faced significant regulatory challenges. This was one of the reasons why Deibit relocated to Dubai in 2023. However, even Russians living in Dubai are banned from registering on the exchange.
This isn’t the exchange’s only recent setback. Last month, it considered a buyout from Kraken. Additionally, data shows that Deribit is a popular exchange within Russia but nowhere near as popular as several other competitors. Meanwhile, Russian citizens are the second-largest demographic of users by country on Deribit’s end.
In other words, these sanctions might actually harm Deribit more than the broader crypto community in Russia. If nothing else, this incident proves the importance of decentralized institutions within crypto.
These international sanctions are still somewhat limited in their reach, and DeFi provides many tools to circumvent them.
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