Binance announced an agreement to transfer its entire Russian operations to CommEX, a crypto exchange established as recently as September 26, 2023. The centralized crypto exchange is operated by CommEX Holding Limited, a company incorporated in the Seychelles. However, the terms of CommEX specify Hong Kong as the governing law. However, the important deal also raises questions.
Binance Leaving Russia
Noah Perlman, Binance’s Chief Compliance Officer, stated, “Given our compliance strategy, continuing operations in Russia is not feasible. However, we are optimistic about the global growth prospects of the Web3 sector and will concentrate on expanding in the other 100+ countries we serve.” A systematic procedure will be implemented for user migration.
Both Binance and CommEX will guide users in transferring their assets to CommEX. Starting immediately, a segment of new user registrations from Russia will be directed to CommEX, with the number increasing gradually. In the upcoming months, Binance plans to phase out all its exchange services and business segments in Russia, ensuring a seamless user experience throughout the transition.
While the financial specifics of the transaction remain confidential, it’s crucial to highlight that Binance is completely withdrawing from the Russian market, Binance said in its announcement. It won’t retain any revenue share post-sale, nor will it have any rights to repurchase shares in the venture.
Understandably, Binance is pulling out of the Russian business in the face of regulatory pressures in the U.S.. Whether this is voluntary or part of a deal with the U.S. authorities is beyond our knowledge. The question is how CommEX will deal with the Western sanctions against Russia. The Seychelles and Hong Kong-registered company is also subject to Western sanctions. Beyond that, very little is known about the crypto exchange, which launched just hours earlier. Whether people from Binance are associated with it is not known.
In the past, Binance has conducted its Russian business through partners such as the Russian payment processor Advcash. It was not disclosed whether this partnership will also be handed over to CommEX. In sum, the press release from Binance and CommEX leaves many important questions unanswered.
If you have any information about Binance or CommEX, please let us know via our whistleblower system, Whistle42.