Key Takeaways
- CommEX shuts operations by announcing a phased approach until May 2024.
- The closure process began on March 25 as new registrations, asset transfers, and deposits halted.
- The news coincides with US Treasury sanctions on Russian fintech firms.
CommEX, a cryptocurrency exchange dubbed the “Russian Binance,” has announced it will cease operations. The exchange came into existence after Binance wound down business in the country amid compliance issues. Meanwhile, users have to withdraw their assets before the platform’s complete shutdown by May 10, 2024.
Closure of CommEX
CommEX emerged as a significant player in the Russian market after Binance shut down its business in September 2023.
It started winding down business on March 25, 2024, by halting new user registrations, asset transfers from Binance, and deposit services for both fiat and cryptocurrencies. It has already set the stage for further restrictions on trading activities in the coming weeks.
From March 28, users will only be able to close existing positions for Simple Futures and Futures Trading, with new positions banned. Similarly, P2P services will undergo restrictions, including the prohibition of new advertisements and orders, followed by the automatic closure of existing orders and advertisements in April.
The notice also states: “For users who still have asset balances on CommEX after May 10, 2024, asset management fees will be imposed. The fee for account asset management is 1% of the snapshot assets per day.”
On the day, the official website will reportedly get delisted. Therefore, the guidance to users is to immediately close positions and withdraw funds.
Russia Flocking to Alternative Payment System
The decision to shutter CommEX comes amid a parallel development. The US Treasury recently announced sanctions on 13 fintech firms and two individuals with ties to Russia. The firms and individuals are accused of helping transactions evade sanctions and fund conflicts.
Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, said in the statement : “Russia is increasingly turning to alternative payment mechanisms to circumvent US sanctions and continue to fund its war against Ukraine.”
Meanwhile, the closure of CommEX raises broader questions about regulations. In an open letter in September, CommEX described itself as a startup that included former Binance employees in its core team. At the time, it clarified that Binance did not own CommEX.
Notably, it said, “We are a global crypto exchange, but from a regional perspective, we have several General Managers who are responsible for overseeing specific territories as well as their highly professional local team mates.”
The letter was an attempt to keep itself safe from the regulatory clampdown that haunted Binance.
Russian Crypto Businesses in Focus
The shutdown of CommEX comes after Binance wound up business from Russia amid compliance issues. Meanwhile, Russia is in global focus for allegedly circumventing sanctions using alternative payment systems, which include crypto.
While private players might be struggling to gain footing in the country, the Kremlin seems to be adapting to the digital front. But, the future of global cryptocurrency exchanges in Russia remains uncertain.
