Report Says Binance Shared Client Data With Russia, Crypto Exchange Denies Allegations
Cryptocurrency exchange Binance has been accused in a media report of agreeing to provide user data to Russiaâs financial watchdog. The trading platform has refuted the allegations. It also insists itâs complying with Western sanctions imposed over Moscowâs invasion of neighboring Ukraine.
Binance Consented to Russian Request for Customer Info, Reuters Claims in âSpecial Reportâ
Binance, the worldâs leading digital asset exchange, has agreed to hand over customer data to Russiaâs financial intelligence agency, a report by Reuters suggests. The article refers to messages allegedly sent by Binanceâs regional head Gleb Kostarev to a business associate revealing that the Russian officials asked for such information, including names and addresses, during a meeting last April.
The Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring) saw its request supposedly motivated by the need for help in the fight against crime. Quoting an anonymous source familiar with the matter, the authors note that at the time, the financial watchdog was trying to trace millions of dollars in bitcoin raised by imprisoned Russian opposition leader Alexei Navalnyâs team.
Rosfinmonitoring labeled his network a terrorist organization a year ago. The Kremlin critic claimed the crypto donations were used to fund efforts to expose corruption inside President Putinâs administration. Supporters who sent money through Russian banks were interrogated, Navalnyâs foundation says. After his arrest in January 2021, it encouraged backers to donate via Binance.
Navalny was detained upon his return to the Russian Federation, after recovering from poisoning that the West blames on Russiaâs Federal Security Service (FSB), an accusation rejected by Russian authorities. Relying on statements from several unidentified persons who interacted with the regulator, Reuters writes that the agency acts as an arm of the FSB. Officially, it is an independent body responsible for combating money laundering and terrorist financing.
Kostarev, Binanceâs representative for Eastern Europe and Russia, reportedly consented to Rosfinmonitoringâs request to agree to share client data, according to the said messages. He also told his business partner he didnât have âmuch of a choice.â Binance commented for Reuters it had been âactively seeking compliance in Russiaâ before the war in Ukraine, which would have required it to respond to âappropriate requests from regulators and law enforcement agencies.â
Crypto Exchange Rejects Claims as âCategorically Falseâ
Quoting an industry research firm, the Reuters article further unveils that Binanceâs trading volumes in Russia have spiked since the conflict began, as Russians sought to protect their assets from sanctions and a devaluing national fiat. Data from Cryptocompare indicated that in March Binance processed almost 80% of all ruble-to-crypto trades. On Thursday, the exchange announced, however, itâs limiting services for Russian account holders to comply with the latest EU sanctions.
Refuting the allegations in the report, Binance described the cited market data as inaccurate, and while pointing out that it âaggressively implemented sanctions against Russia,â in answers to questions from Reuters, it reiterated its belief that âit would be unethical for a private organization to decide unilaterally to freeze millions of innocent usersâ accounts.â In a statement published Friday, the company said it had âstopped working in Russiaâ as soon as the war started.
While emphasizing that âfulfilling disclosure obligations to the authorities in each jurisdiction is a large part of becoming a regulated business,â the global crypto trading platform said that the suggestions it shared any user data, including related to Alexei Navalny, with agencies controlled by the FSB and Russian regulators are âcategorically false.â Binance insisted it had not sought to assist the Russian state in its attempts to investigate the opposition leader.
What are your thoughts on the report alleging that Binance shared user data with Russiaâs financial watchdog? Let us know in the comments section below.