Thursday, December 7, 2023
Blockchain

Binance CEO Clarifies Details on CommEx Integration

Key Takeaways

* CZ, Binance’s CEO, provides clarifications on Binance’s association with CommEX.

* Cryptocurrency transfers between the platforms are in progress.

* Binance’s broader compliance strategy leads to its Russian operations’ sale to CommEX.

CZ’s Clarifications on Binance and CommEx Association

In a recent tweet, Changpeng Zhao (CZ), CEO of Binance, provided insights into the nature of the relationship between Binance and CommEX. He highlighted several key points:

Cryptocurrency transfers are underway between Binance and CommEX as users shift platforms. Older transactions were noted during the testing phase of the integrations.

Some ex-Binance CIS team members may have already joined CommEX, and others might follow. CZ regards this as a positive move.

CommEx’s design, APIs, and other interfaces align closely with Binance’s, a request made by Binance to ensure a seamless user transition.

CommEX will not cater to users from the US or the EU due to IP and KYC restrictions, a condition Binance stipulated.

Refuting speculations, CZ stated he does not hold an Ultimate Beneficial Owner (UBO) position in CommEX nor owns any shares. The deal excludes any buyback options.

Binance’s Decision Amid Regulatory Challenges

Binance, the world’s leading cryptocurrency exchange, has announced the sale of its entire Russia-based operations to CommEX. This significant strategic decision aligns with Binance’s emphasis on compliance and regulatory adherence across the numerous countries it operates within.

While Russia is ramping up regulations on crypto exchanges, Binance has also been under U.S. scrutiny for potential sanctions violations concerning Russia. On May 6, 2023, the U.S. Department of Justice initiated an inquiry into Binance, focusing on potential U.S. sanctions violations. This move was not isolated, with previous probes in 2021 and early 2022.

Earlier, in April 25, 2023, Binance discreetly lifted certain restrictions on Russian users that were initially imposed in March 2022, following EU’s sanctions on Russia. By April 2023, changes were made to allow deposits in Russian rubles and other currencies.

The EU’s extension of its sanctions impacted Russian users’ access to EU-registered crypto services. This shift led platforms like LocalBitcoins, Crypto.com, and Blockchain.com to cut ties with Russian clients.

To ensure a smooth transition, Binance and CommEX devised a systematic migration process for users and assets, assuring Binance’s existing Russian users of the security of their assets. The transition is expected to span a year, with some new registrations being redirected to CommEX.

While financial details remain undisclosed, Binance confirmed there would be no continued revenue from the sale and marked a complete exit from the Russian market.

Binance, though departing from Russia, remains bullish about the Web3 sector’s global potential and plans to focus on the 100+ other countries in its operation portfolio.

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