Report Says Binance Shared Client Data With Russia, Crypto Exchange Denies Allegations – Binance, a cryptocurrency exchange, has been accused of agreeing to provide user data to Russia’s financial authority, according to a media report. The charges have been denied by the trading platform. It also claims to be abiding with Western sanctions imposed in response to Moscow’s invasion of Ukraine.
According to Reuters, Binance, the world’s largest digital asset exchange, has agreed to send over customer data to Russia’s financial intelligence agency. The post cites communications allegedly received by Binance’s regional leader Gleb Kostarev to a business associate, alleging that Russian officials requested such information, including addresses and names, during a meeting in April.
The Russian Federation’s Federal Financial Monitoring Service (Rosfinmonitoring) saw their request as apparently motivated by a need for assistance in the fight against crime.
The authors note that at the time, the financial watchdog was trying to track millions of dollars in bitcoin raised by imprisoned Russian opposition leader Alexei Navalny’s team, citing an unnamed source acquainted with the subject.
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His network was designated as a terrorist organization by Rosfinmonitoring a year ago. The cryptocurrency donations, according to the Kremlin critic, were used to fund efforts to uncover wrongdoing inside President Putin’s administration. Navalny’s foundation claims that supporters who sent money through Russian banks were investigated. It invited backers to donate via Binance after his arrest in January 2021.
After recovering from a poisoning that the West blames on Russia’s Federal Security Service (FSB), Navalny was detained upon his return to the Russian Federation.
This accusation was denied by Russian authorities. According to Reuters, the agency functions as an arm of the FSB, based on statements from multiple unidentified people who engaged with the regulator. Officially, it is a non-profit organization tasked with preventing money laundering and terrorism financing.
According to the messages, Kostarev, Binance’s representative for Eastern Europe and Russia, apparently agreed to Rosfinmonitoring’s request to disclose client data. He also said that he didn’t have “much of a choice” to his business partner.
According to the Reuters article, Binance’s trade volumes in Russia have increased since the conflict began, as Russians tried to protect their assets from sanctions and a depreciating national currency.
According to Cryptocompare data, Binance processed nearly 80% of all ruble-to-crypto trades in March. The exchange said on Thursday, however, that it is restricting services for Russian account holders in order to comply with the latest EU restrictions.
In response to questions from Reuters, Binance defined the cited market data as inaccurate, and while stating that it “aggressively implemented sanctions against Russia,” it reiterated its belief that “it would be unethical for a private organization to unilaterally freeze millions of innocent users’ accounts.” The corporation said it “stopped working in Russia” as soon as the war began, according to a statement released on Friday.
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While the global crypto trading platform stressed that “fulfilling disclosure requirements to the authorities in each jurisdiction is a major part of becoming a regulated business,” it denied that it shared any user data, including that of Alexei Navalny, with FSB-controlled agencies or Russian regulators. Binance stated that it had not attempted to aid the Russian government in its investigation of the opposition leader.