Binance exits Russian market by selling to CommEX

In a strategic move, cryptocurrency giant Binance has officially departed from the Russian market by selling its Russian operations to a newly established crypto exchange entity called CommEX. While the specific financial terms of this transaction remain undisclosed, it represents a comprehensive exit, signaling the end of Binance’s involvement in Russia, including any revenue sharing or share repurchase options.

The announcement of this exit, made on September 27, underscores Binance’s decision to divest its Russian business entirely. As part of the transition process, Binance will oversee an off-boarding procedure lasting up to a year to ensure a smooth experience for its existing Russian users. Importantly, the exchange has assured that all assets of these users are safe and securely protected throughout this transition.

Binance’s Chief Compliance Officer, Noah Perlman, explained the rationale behind the move, saying, “As we look towards the future, we recognise that operating in Russia is not compatible with Binance’s compliance strategy.” He went on to express confidence in the long-term growth of the global Web3 industry and emphasized that Binance will now focus its efforts on serving the 100+ other countries in which it operates.

Binance is committed to facilitating the migration of its Russian users to the newly established CommEX exchange. In collaboration with CommEX, Binance will guide users through the process of transferring their assets to the new platform. This migration process will include an immediate redirection to CommEX for Russian users who have completed Know Your Customer (KYC) checks. Over the coming months, Binance will gradually phase out its platform in Russia while ensuring a seamless transition for users.

Binance CEO Changpeng Zhao highlighted a special benefit for holders of Binance’s native token, BNB, during this transition. BNB holders will continue to enjoy a 25% trading discount when using the CommEX platform.

The announcement emphasized that Binance’s exit from Russia is definitive, with no lingering ties to the exchanged entity. Unlike some international companies that maintain revenue-sharing agreements in Russia, Binance will not have an ongoing revenue split or any option to repurchase shares in CommEX.

Interestingly, CommEX had announced its launch just a day prior, on September 26. The platform aims to offer cryptocurrency trading services, encompassing spot, futures, and peer-to-peer trading. Notably, it seems to be primarily targeting Russian users initially, as its interface is currently available in Russian and English only.

Binance’s withdrawal from the Russian market comes after facing regulatory challenges and compliance issues associated with Western sanctions against Russia. Despite these pressures, Binance has been actively promoting its services for Russian users as recently as August 2023. However, the exit process gained momentum with the departure of key Russian executives from the exchange in early September.

Russia had been one of the significant markets for Binance, with data from SimilarWeb indicating that Russia was the top market for user visits to the Binance.com website, accounting for 6.9% of total visits at the time of writing. This exit from Russia marks a significant shift in Binance’s global strategy.