The world’s largest cryptocurrency exchange Binance blocks accounts linked to the Russian government

This development comes as Binance is increasingly working to comply with sanctions amid concerns that Russians may turn to crypto to hide their wealth. Russia has faced a wave of sanctions since hitting Ukraine, and major crypto exchanges like Binance have faced pressure to block Russian users. Meanwhile, political leaders in Europe and the United States have focused their attention on cryptocurrencies several times, since the beginning of the war, fearing that Russia could use cryptocurrencies. to circumvent sanctions.

Recently, Binance Holdings Ltd. closed several accounts linked to relatives of senior Kremlin officials amid a wave of international sanctions in response to Russia’s attack on the Kremlin. Ukraine.

Specifically, Binance – the world’s largest cryptocurrency exchange by trading volume said that Polina Kovaleva, stepdaughter of Foreign Minister Sergei Lavrov, and Elizaveta Peskova, daughter of Presidential spokesman Dmitry Peskov Vladimir Putin is among those blocked for the past two months. Binance also said that it has also banned Kirill Malofeev, son of Konstantin Malofeev, a financier accused by the US Treasury Department of being a major source of financing for Russians promoting separatism in Crimea.

According to Chagri Poyraz, global head of sanctions enforcement at Vancouver-based company Binance, the exchange is continuing to check to find more people associated with the sanctioned individuals. may be using your service.

“What’s different is that our compliance screening activities are ‘proactive’, aiming to detect and prevent financial crime risks before any legal or regulatory action is taken against individuals. or this organization,” said Mr. Chagri Poyraz.

Chagri Poyraz also said that Binance blocked cryptocurrency exchange Garantex on March 11, weeks before the US Treasury Department’s Office of Foreign Assets Control targeted the organization.

Binance said it blocked Peskova, the daughter of President Vladimir Putin’s spokesman Dmitry Peskov, on March 3, when she tried to use the exchange through a third-party broker. She was sanctioned by the US Treasury Department the following week. Peskova later expressed outrage at Western sanctions, saying such actions were “completely unfair and baseless”. “I’m really surprised that the introduction of such strange sanctions on a 24-year-old has nothing to do with the situation,” she said. Peskova’s last Instagram post from March 12 had just one word: “Peace”.

Last week, Binance said it was restricting services in Russia, one of the largest markets globally, following the latest European Union sanctions against Moscow. On April 21, Binance adopted a series of restrictions for Russian citizens or residents of Russia, restricting trading on accounts holding more than 10,000 euros or $10,800. Accounts classified under this restriction will be placed in withdrawal-only mode. No new deposits or transactions will be allowed on these accounts.

This limit also includes all spot funds, futures contracts, custodial wallets, and deposits and earnings. The company says the changes will not affect unsanctioned Russians, who can be verified by address verification to show proof that they live outside the country.

Binance CEO Changpeng Zhao has previously said that Binance will comply with the sanctions but will not “unilaterally freeze millions of accounts of innocent users” due to Western sanctions against Russia. .

Currently, crypto exchange Binance is taking more measures to prevent the Russian government from mitigating the impact of sanctions through the use of cryptocurrencies. “Proud to be part of a team that makes a real difference,” Binance’s newly appointed head of global sanctions enforcement, Chagri Poyraz, wrote on his LinkedIn page about the new measures. of Binance. According to Poyraz, Binance continues to monitor its platform to find more people associated with sanctioned individuals who may be using its services.

Responding to this latest move, Mykhailo Fedorov of Ukraine’s Ministry of Digital Transformation and one of the key figures responsible for the government’s pro-crypto stance noted in a tweet. “Everyone connected to Putin’s regime will feel the consequences of war,” said Friday.

This crackdown has earned Binance praise from industry experts as they worry about Russia’s ability to evade sanctions through the cryptocurrency. But it has also sparked a backlash from some who say the restrictions have gone too far.

While Binance has made it clear that it will comply with the sanctions, the company is also accused of having close ties to Russia’s financial intelligence unit. An April 22 investigation by Reuters alleged that Binance handed over user data to Russian authorities when they were looking for activity related to opposition leader Alexei Navalny. But Binance denied these claims shortly after.