Ignoring sanctions? The Wall Street Journal: Binance still processes large amounts of ruble transactions, end-to-end services aiding Russian capital flight

The war between Ukraine and Russia has been going on for nearly a year and a half. In order to resist Russia's invasion of Ukraine, Western countries have imposed a series of financial sanctions on Russia. However, according to a report by The Wall Street Journal, Binance still supports a large number of ruble transactions and enables Russians to transfer assets abroad through peer-to-peer services.

The Wall Street Journal: Binance Continues to Process Large Amounts of Ruble Trades

According to a report by The Wall Street Journal, following the start of the war between Ukraine and Russia, Binance has restricted Russian trades on its platform in compliance with Western sanctions. However, external data shows that Binance is still processing a significant amount of Ruble trades. Through multiple intermediaries, Russian users are still able to convert funds from sanctioned banks into balances on Binance.

As shown in the data below, while the Ruble-cryptocurrency monthly trading volume on Binance has decreased, the trading volume in July this year still amounts to $8 billion, with USDT trading dominating.

Furthermore, Binance also supports peer-to-peer trading of Rubles with digital tokens, which involves banks and company websites on Western blacklists.

Due to extensive U.S. sanctions on the Russian financial industry, other banks have cut off ties. Many Russians who are neither sanctioned nor able to wire Rubles to foreign bank accounts or exchange money into other currencies have turned to cryptocurrencies as one of the ways to escape restrictions.

Binance's Peer-to-Peer Service Becomes an Escape Route for Russians

The Wall Street Journal reports that Russian banks claim the primary method to convert Rubles into cryptocurrencies is through peer-to-peer services, with Russians conducting peer-to-peer transactions valued at around $428 million per month from October to March.

In addition, the U.S. Treasury has identified peer-to-peer cryptocurrency transactions as a potential means to evade U.S. sanctions. Such transactions do not directly involve exchanges but are often facilitated by platforms like Binance, which match buyers and sellers and charge processing fees.

Former official of the U.S. Treasury's Office of Foreign Assets Control, Michael Parker, stated that a company does not need to establish formal relationships with sanctioned Russian banks and may face potential U.S. sanctions risks. If a company offers "exceptions" where users can obtain currencies or services not available from sanctioned banks, this could be seen as substantial assistance to these institutions.

The Wall Street Journal further points out that upon reviewing Binance's peer-to-peer service website, the site provides at least five sanctioned Russian lending institutions as payment options for Russian customers, including Rosbank and Tinkoff Bank.

Through Binance's peer-to-peer service, sellers can provide bank account information to buyers so they can receive funds directly. Binance will hold the seller's cryptocurrency in custody until they confirm receipt of payment.

Binance: Fully Compliant with Sanctions Restrictions

Regarding this matter, sources revealed to The Wall Street Journal that the Department of Justice is investigating whether Binance may have violated U.S. sanctions against Russia.

A Binance spokesperson stated that Binance and its legal entities in the EU fully comply with the relevant restrictions on sanctions against Russian citizens, and Russian citizens are not allowed to use their peer-to-peer service to buy or sell U.S. dollars and euros.