The CommEX exchange, which six months ago announced the purchase of the Russian segment of the largest crypto exchange Binance, announced its closure as suddenly as it appeared. In the context of tightening regulation in the cryptocurrency sector, it was difficult to count on the success of a platform that never disclosed its owners, according to Yuri Brisov and Elizaveta Lobuteva from Digital & Analogue Partners. What conclusions can Russian crypto asset owners draw from what happened and what risks should they be aware of?
Cryptocurrency exchange nigeria whatsapp resource CommEX announced that it would completely cease operations by May 10, 2024. The exchange became the successor to the Binance crypto exchange, after the latter announced its decision to leave the Russian market in September 2023. At that time, Binance was the largest exchange both in the world and in the Russian market segment. Nothing more was known about the CommEX exchange, which appeared just in September 2023 and immediately decided to buy out Binance's Russian business.
To understand the reasons for the closure of the CommEX exchange, it is worth recalling what has been happening with the regulation of the crypto industry in general and Binance in particular recently. After the introduction of sanctions against Russia, cryptocurrency has become one of the few ways for Russian citizens to withdraw funds from the country. The number of transactions made by Russian users through Binance tripled in 2023.
However, sanctions have not stood still. The eighth package of European sanctions, adopted in October 2022, completely banned European companies from providing Russian residents and companies with access to crypto services, while American sanctions banned companies operating in the United States from providing services that facilitate sanctions evasion. The US Treasury Department's sanctions unit, OFAC, began maintaining a list of crypto wallets associated with sanctions violations and freezing assets in such wallets.
With the introduction of sanctions against Russia, many crypto platforms faced a dilemma: continue operating in Russia, risking violating sanctions, or leave the market to avoid legal and financial consequences. Coinbase and Kraken chose the first option, closing the accounts of all Russian users. OKX and FTX exchanges restricted ruble transactions and access to the platform for Russians who could not prove that they were not Russian residents. On Binance, which imposed some restrictions on Russians, most of the restrictions were easy to bypass by changing the information about yourself on the site. The Binance p2p platform, which allows users to make transactions with each other directly, has become not only a popular window for withdrawing funds from Russia, but also a catalyst for various speculative activity.