Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
Russian nationals, natural persons residing in Russia and entities operating in Russia that have more than 10,000 EUR in crypto assets will be affected by the ban.
The European Union has triggered its fifth package of sanctions against Russia after the military operation in Ukraine. The fifth round of sanctions has six pillars which include an import ban on coal from Russia, a full transaction ban on four key Russian banks, a ban on Russian vessels and Russian-operated vessels from accessing EU ports, a targeted export ban, a specific import ban, and general targeted measures including a general EU ban on the participation of Russian companies in public procurement in member states or exclusion from financial supports. In response, Binance, one of the major cryptocurrency exchanges, has restricted Russian customers from engaging in some activities on the platform according to a recent announcement.
“While these measures are potentially restrictive to normal Russian citizens, Binance must continue to lead the industry in implementing these sanctions. We believe all other major exchanges must follow the same rules soon,” said Binance.
This restriction does not only apply to Russian nationals but also, to natural persons residing in Russia and entities operating in Russia that have more than 10,000 EUR in crypto assets. Binance, therefore, urged users to complete their proof of address verification. Affected accounts will no longer be able to make deposits or execute trades. However, they will be put into withdrawal-only mode.
According to the announcement, the restriction will also affect spot, futures, custody wallets, and staked and earned deposits. As verified with proof of address, the account of Russian nationals staying outside the country, and the account of Russian nationals or natural persons residing in Russia or entities established in the country with crypto assets valued below 10,000 EUR will not be unaffected. The announcement further states that affected accounts would not be restricted right away but would be given 90 days to close out their positions. Also, no new positions can be added.
“Russian nationals or natural persons residing in Russia, or legal entities established in Russia, with open Futures/Derivatives positions, and who have crypto account balances that exceed 10,000 EUR will be given 90 days to close out their positions. No new positions will be allowed to be added.”
This decision is contrary to their earlier position a couple of months ago after stating that they will not freeze the accounts of all Russian customers. Binance stated that they will only restrict the activities of specific individuals who have been sanctioned. This comment came after Mykhailo Fedorov, vice prime minister of Ukraine, appealed to all major crypto exchanges to block Russian customers. Binance stated that crypto is meant to provide financial freedom to all individuals across the globe, so imposing this ban will compromise the very reason crypto exists.
“We are not going to unilaterally freeze millions of innocent users’ accounts,” said Binance.