Binance, the world’s largest crypto exchange, said it was required to limit trading activities of Russian users in light of new European sanctions against Moscow.
The exchange said it will limit services for Russian entities who have crypto assets worth over 10,000 euros ($10,893). Such accounts will no longer be permitted to trade or deposit tokens, and will only be allowed to withdraw their holdings.
Deposits into Russian accounts that fall under the category will also be blocked, Binance said. The rules apply to all Russian nationals and entities residing in Russia.
The move comes after the European Union adopted a fifth wave of sanctions against Russia, over the country’s invasion of Ukraine. The latest sanctions involve asset freezes on several Russian entities, and also prevent Russians from receiving EU funding.
Sanctions over Russia’s invasion of Ukraine have effectively blocked the country from the western financial system.
Binance changes tone on Russian users
Binance’s latest move is a departure from its initial stance on providing services to Russian citizens. The exchange agreed to comply with sanctions against Russian entities. But it had firmly rejected calls to stop servicing Russian individuals.
But Binance appears to be swimming against the tide. Earlier this year, the exchange had suspended support for Visa and Mastercard cards in Russia, after the two pulled out of the country.
While these measures are potentially restrictive to normal Russian citizens, Binance must continue to lead the industry in implementing these sanctions. We believe all other major exchanges must follow the same rules soon.
Binance said in a blog post
Other crypto exchanges had also rejected calls to halt Russian services, with Coinbase CEO Brian Armstrong calling crypto a “lifeline” for many Russians. It was not immediately clear how other exchanges will comply with the new sanctions.
Russia leans into crypto adoption.
General consensus is that Moscow will be unable to undermine strict sanctions through cryptocurrencies. But that has not stopped the country from ramping up its efforts in crypto adoption.
A proposed bill intends to approve certain kinds of crypto as legal tender. The bill also attempts to establish a broad regulatory framework for crypto in Russia.
The Russian government also intends to leverage the country’s large energy reserves in mining more crypto. It will establish an official register of miners, and also issue subsidies for mining businesses.