Russian exchange users are gradually migrating to alternative platforms
The world's largest crypto exchange, Binance, announced that by the end of January it will completely stop operations with Russian rubles — both in trading and in other internal services.. The exchange urged Russian users to proactively convert rubles in their accounts into other assets or withdraw them through its partners.
Earlier, Binance announced the termination of ruble transactions on the internal p2p platform, and then announced its complete closure for Russian users. Starting January 30, the exchange will also delist all existing spot trading pairs with the ruble (BTC/RUB, USDT/RUB and others), and open orders for these trading pairs will be forcibly closed.
In September 2023, Binance announced its withdrawal from Russia. The decision comes amid growing regulatory pressure and an investigation by the US Department of Justice related, among other things, to the possible use of Binance by Russian users to circumvent sanctions.
Later, in November, the US authorities and Binance reached a pre-trial settlement: at that time, the head of the exchange, Changpeng Zhao, admitted guilt and resigned, and the platform itself was ordered to pay a record fine of $4.3 billion. The cessation of support for transactions with rubles became part of Binance’s decision to exit Russia and sell its local business to the CommEX exchange.
According to the analytical company Kaiko, the weekly volume of cryptocurrency trading using the ruble in 2023 decreased by 6 times from $300 million to $45 million. This was facilitated by regulatory restrictions, which led to the closure of cryptocurrency pairs with the ruble and a ban on trading for Russian users on major exchanges.
emphasizes that there will be no restrictions for Russians on the site.
What are the alternatives?
P2p trading is one of the fastest growing segments on CommEX, said regional director of the exchange Anton Toroptsev. According to him, since the beginning of January, the volume of transactions concluded on the p2p marketplace has reached 40 million USDT, and the average bill of a p2p operation is more than $450.
There are not many crypto exchanges with p2p marketplaces that allow you to buy and sell cryptocurrency for Russian rubles — 5-7 platforms work with users from Russia, Toroptsev adds.
According to Nikita Zuborev, an analyst at the exchange services aggregator Bestchange.ru, there are risks that platforms face when working with users from Russia. Automated AML services can flag all cryptocurrency leaving such an exchange as violating sanctions.
Systems for marking wallets and specific transactions are used on most crypto exchanges and other services operating in the legal field. Due to the transparency of the blockchain as a public register of cryptocurrency transfers, monitoring systems track the intersection of transactions with labeled sources — sanctioned exchange services, criminal wallets or so-called cryptomixers. If a user’s account receives funds from a marked address with a negative reputation, this increases the so-called risk score of the cryptocurrency, and the exchange’s compliance service can block these funds.
Traditional online exchangers are likely to receive additional demand due to Binance’s final exit from the Russian market, states Zuborev. However, this will only affect a portion of users, since many of them also want access to intraday trading, which only cryptocurrency exchanges can offer.
Of the existing alternatives to Binance, among the largest platforms are ByBit, OKX, Bitget or HTX (formerly Huobi), and Bybit significantly attracts the audience. The platform has significantly increased the liquidity pool in the p2p segment: the daily volume of cryptocurrency sales increased to $9.3–12.6 million, and the number of unique users submitting p2p orders doubled after Binance restricted Russian clients.
However, the more popular the service becomes among Russians, the higher the likelihood of the Binance scenario repeating itself, warns Zuborev. “Regulators may also pay attention to other services that will be faced with the choice of whether to work with the USA or with Russia. Due to the difference in market volumes, the choice is often obvious for them,” the analyst sums up.