In order to comply with international sanctions, in recent times, Binance has been winding down its Russian operations.
Now, the firm has moved to finalize its exit from the country. In a statement on Wednesday, September 27, 2023, Binance announced that it has entered into an agreement to sell 100% of its Russia business to the recently launched exchange CommEX. It did not disclose the financial details of the deal.
Binance’s exit from the Russian market may not come as a surprise to users in the country. Since the imposition of international sanctions in 2022, it has become increasingly difficult for the firm to maintain its Russian services.
Doing business in Russia exposes Binance to risks due to sanctions affecting individuals and businesses. Additionally, Russian banks and payment services face sanctions, restricting Binance’s ability to handle ruble-based transactions, even for non-sanctioned customers.
Commenting on the announcement, Binance’s Chief Compliance Officer, Noah Perlman, said “We recognize that operating in Russia is not compatible with Binance’s compliance strategy.”
“We remain confident in the long-term growth of the Web3 industry around the world and will focus our energy on the 100+ other countries in which we operate,” he added.
Incidentally, on Monday, September 25, 2023, Binance announced that it would relaunch services for Belgian residents for the first time since the Financial Services and Markets Authority (FSMA) ordered it to cease operations there in June.
Although Binance did not disclose too many specifics regarding the sale of its Russian business, it made clear that the deal would create a clean cut.
“Unlike similar deals from international companies in Russia, Binance will have no ongoing revenue split from the sale, nor does it maintain any option to buy back shares in the business,” Wednesday’s statement said.
But who is behind the new Exchange?
CommEX seemingly appeared out of thin air on Tuesday, when it launched with very little fanfare. Given the timing of Wednesday’s announcement, some might wonder if the new exchange was created solely for the purpose of onboarding former Binance customers.
The CommEX website does not provide details about the company that operates the exchange. Regarding its owners, the website states only that it is “backed by top-tier crypto VC.”
CommEX did not immediately respond to a request for comment.