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Binance Updates Russian Account Policy in Response to EU Sanctions

Binance – the world’s largest crypto exchange – recently released an update on its treatment of Russian accounts due to international sanctions. The company will place accounts holding crypto worth over 10,000 EUR into “withdrawal-only mode”, preventing them from making more trades.

Politics Versus Principles

As its war with Ukraine continues, sanctions against Russia from the former’s allies have continued to tighten. Meanwhile, both the European Union and United States have been particularly concerned about crypto’s potential role in bypassing these restrictions.

On Tuesday, the IMF warned that non-compliant or poorly managed crypto exchanges could be exacerbating this issue. For crypto traders, exchanges are the primary means for cashing out their holdings into more spendable fiat money.

The political pressure has put crypto asset service providers into a moral conundrum. They must tread the delicate line between regulatory compliance, and the anti-censorship ideals that the industry was founded upon.

“While these measures are potentially restrictive to normal Russian citizens, Binance must continue to lead the industry in implementing these sanctions.” announced the company on Thursday. “We believe all other major exchanges must follow the same rules soon.”

Binance was among other major exchanges, including Coinbase and Kraken, which refused a blanket ban on Russian users last month. “We are not going to unilaterally freeze millions of innocent users’ accounts,” a spokesperson told CNBC at the time.

Nevertheless, the same CEOs that spoke out against this approach have promised to comply with the law, where required. Binance’s new restrictions follow the EU’s fifth round of sanctions, which “prohibited the provision of high-value crypto-asset services to persons and entities in Russia.”

The Restrictions

The 10,000 EUR limit reportedly covers spot and futures trades, custody wallets, and both earned staked deposits. Furthermore, Binance prohibits deposits to any account belonging to Russian nationals, natural persons, and legal entities in Russia.

Relevant accounts with open futures/derivative positions, or with crypto balances have 90 days to close out their positions. They may not add to their current holdings on the platform.

Normal activity will still be possible for Russians residing outside of Russia, or for Russians with a balance under 10,000 EUR.

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On Wednesday, the US Treasury sanctioned a host of Bitcoin mining companies residing in Russia. The country fears that mining could provide an avenue for monetizing stranded oil resources that Russia cannot sell.

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