Report Says Binance Shared Client Data With Russia, Crypto Exchange Denies Allegations

Report Says Binance Shared Client Data With Russia, Crypto Exchange Denies Allegations

Report Alleges Binance Shared Client Data With Russia, Crypto Exchange Denies

Cryptocurrency exchange Binance has been accused in a media report of agreeing to provide user data to Russias financial watchdog. The trading platform has refuted the allegations. It also insists its complying with Western sanctions imposed over Moscows invasion of neighboring Ukraine.

Binance Consented to Russian Request for Customer Info, Reuters Claims inSpecial Report

Binance, the worlds leading digital asset exchange, has agreed to hand over customer data to Russias financial intelligence agency, a report by Reuters suggests. The article refers to messages allegedly sent by Binances 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 Navalny’Dampf.

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 Putins administration. Supporters who sent money through Russian banks were interrogated, Navalnys 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 Russias 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, Binances representative for Eastern Europe and Russia, reportedly consented to Rosfinmonitorings request to agree to share client data, according to the said messages. He also told his business partner he didnt havemuch of a choice.Binance commented for Reuters it had beenactively seeking compliance in Russiabefore the war in Ukraine, which would have required it to respond toappropriate requests from regulators and law enforcement agencies.

Crypto Exchange Rejects Claims asCategorically False

Quoting an industry research firm, the Reuters article further unveils that Binances 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 angekündigt, jedoch, its 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 itaggressively implemented sanctions against Russia,” in answers to questions from Reuters, it reiterated its belief thatit would be unethical for a private organization to decide unilaterally to freeze millions of innocent usersaccounts.In a statement published Friday, the company said it hadstopped working in Russiaas soon as the war started.

While emphasizing thatfulfilling disclosure obligations to the authorities in each jurisdiction is a large part of becoming a regulated business,” 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 arecategorically false.Binance insisted it had not sought to assist the Russian state in its attempts to investigate the opposition leader.

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