EU Sanctions Prompt Binance to Introduce Russian Restrictions

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In Brief
  • Binance has introduced restrictions for Russian nationals, in compliance with the fifth round of EU sanctions.

  • The exchange will be limiting services for “Russian nationals or natural persons residing in Russia, or legal entities established in Russia.”

  • Previously, Binance's CEO had said that a broad application of sanctions against Russian citizens would be “unethical.”

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Binance has introduced restrictions for Russian nationals in compliance with the fifth round of EU sanctions against Russia.

The exchange will be limiting services for “Russian nationals or natural persons residing in Russia, or legal entities established in Russia,” with crypto assets over €10,000, according to an announcement on its website. 

Binance said that deposits and trading will no longer be permitted on applicable accounts, which have been put into withdrawal-only mode. The exchange added that this also includes limits on includes spot, futures, custody wallets, and staked and earned deposits. Additionally, Binance warned that all deposits made to these accounts would be restricted.

The announcement also requested that users complete proof-of-address verification, as accounts for Russian nationals who can verify residing outside Russia would remain active and unaffected, provided their assets remain below €10,000.

It added that this would be the case for Russian nationals residing in Russia or legal entities established in Russia with assets on the exchange under €10,000. The latter group who have open futures/derivatives positions on the exchange have 90 days to close them.

Binance said it must lead by example

While acknowledging that “these measures are potentially restrictive to normal Russian citizens,” the world’s largest cryptocurrency exchange by volume said that it must continue to lead by example, and believes that “all other major exchanges must follow the same rules soon.” 

The EU introduced a new round of sanctions earlier this month targeting crypto wallets, banks, currencies and trusts. The €10,000 threshold Binance has imposed in compliance with these new limitations is part of the effort to close potential loopholes which could enable Russians to move money abroad. A recent study from Chainalysis indicated however that crypto exchanges lack the liquidity for Russia’s oligarchs to effectively evade sanctions.

Previously, Binance CEO Changpeng Zhao had said that a broad application of sanctions against Russian citizens would be “unethical.” However, Zhao added that those specifically targeted by sanctions were being restricted. Additionally, Binance said last month that cards from Russian banks under sanctions would no longer be usable on the platform.

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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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