Crypto exchange Binance exits Russia amid US investigations on breach of Ukraine sanctions

Binance said it exited its Russia business by selling it to CommEX, a cryptocurrency exchange that says it officially launched on Tuesday.

“As we look toward the future, we recognise that operating in Russia is not compatible with Binance’s compliance strategy,” Noah Perlman, Binance’s chief compliance officer, wrote in a blog post on the company’s website published Wednesday. The company did not provide financial terms.

Payments in cryptocurrency as well as digital-asset exchanges are prohibited on Russian territory. However, Russian citizens and companies are free to use offshore cryptocurrency platforms as a settlement instrument for transferring funds abroad and receiving funds from abroad.

CommEX was launched on Thursday, according to its website, which stated its parent company CommEX Holding is based in the Seychelles. Both Binance and CommEX use Hong Kong law as the governing rules for their platforms, according to their respective terms of service. CommEX is prohibited from offering services in the US, most of the countries in the European Union and other nations and territories including Singapore, Iran, Cuba, Syria, North Korea and Crimea, according to its service terms.

“Neither Binance nor its executives have shares or profit-sharing with CommEX,” Binance spokesman Simon Matthews said in a text message to Bloomberg News.

“To ensure a smooth process for existing Russian users, the off-boarding process will take up to one year,” Binance said in the post. It added that it will not “maintain any option to buy back shares in the business”, in Russia.