Key Takeaways:
- Leading cryptocurrency exchange Binance is considering leaving the Russian market.
- The company held its first community meetup in Armenia, a former USSR member state.
- The decisions come amid regulatory pressures from Europe and the United States.
YEREVAN (CoinChapter.com) — Binance, the world’s largest cryptocurrency exchange by volume, held its first Community Meetup in Yerevan, the capital of Armenia. The unprecedented event bears significance amid reports that the crypto giant is contemplating an exit from Russia.
The speculations are fueled by reports of several challenges posed by ongoing regulatory obstacles. Binance has faced compliance issues in the United States, among other countries.
The exchange has come under pressure from the West. Several nations want Binance (BNB) to disassociate itself from any illicit transactions on behalf of Russian individuals.
Meanwhile, Vladimir Smerkis was among the company representatives who attended the Armenia meetup. Significantly, he is the General Manager and regional director of Binance in Russia and the CIS countries.
According to local media reports, he presented Binance’s achievements and responded to questions and suggestions from Armenian users.
“Armenia is a hotbed of international IT specialists. Moreover, the local specialists are quite qualified. In these few days that I’ve been here, I’ve received a lot of emails from various projects that are trying to find partnerships with Binance,”
Armenia media platform B24.am quoted Smerkis saying.
The Binance CIS chief also expressed interest in strengthening the company’s foothold in the country.
Binance doesn’t rule out a full Russia exit
Binance is currently grappling with multiple legal actions initiated by US regulators. As stated in the WSJ report, the cryptocurrency exchange has already stated that it is considering all options, including a complete withdrawal from the Russian market.
The moves come days after the company finally removed sanctioned Russian banks from its peer-to-peer (P2P) service.
On August 22, a separate Wall Street Journal report disclosed that Binance had included sanctioned Russian banks like Tinkoff and Rosbank in its list of transfer options. This move prompted criticism, raising concerns that Binance might infringe on sanctions by endorsing these banks as viable payment channels.
Subsequently, various Russian news sources began reporting that Binance had taken these banks off its roster of payment methods. However, these banks resurfaced on the exchange under the code names “yellow” and “green.” While “yellow” represented the sanctioned bank Tinkoff, “green” represented the sanctioned bank Rosbank.
Last week, the crypto firm finally removed these banks from the list.
In response to such allegations that Binance facilitated the movement of funds by Russian nationals abroad earlier this year, it has been taking steps to align itself with international sanctions.
The company has previously taken action against influential Russians. It froze the accounts linked to Elizaveta Peskova, the daughter of Dmitry Peskov, who serves as the spokesperson for Russian leader Vladimir Putin.
Additionally, Binance shut down accounts associated with Polina Kovaleva, the stepdaughter of Foreign Minister Sergei Lavrov.
Following criticisms, the company has recently restricted its peer-to-peer trading services for Russians, permitting trading only in rubles.
It is early to speculate if Binance will establish a strong presence in Armenia. However, it is currently mulling a “full exit” from Russia.
Russian IT specialists flock to Armenia to circumvent sanctions
Following the Western sanctions imposed on Russia as a result of its invasion of Ukraine, several young professionals have left the country. Some oppose Vladimir Putin’s regime and his war plans, while others look for a way to escape the harsh sanctions.
Armenia, as a result, has become one of the top choices of those Russians looking for safer alternatives. Many of these are IT professionals who worked for American or European firms.
In February 2022, the EU, the UK, and other allies banned the Russian Central Bank and major banks in Russia from the worldwide banking transaction message network – SWIFT.
Consequently, many young professionals and freelancers found themselves unable to receive their paychecks from abroad. Moving to Armenia, a former USSR member, came as a way to circumvent this obstacle.
By July last year, over 80% of the nearly 6,000 foreigners working in the Armenian IT sector were Russians. As per the country’s Economy Minister Vahan Kerobyan, the agencies had registered as many as 300 large Russian-funded companies between February and August of 2022.
Moreover, around 2,500 small Russian businesses also received registrations during the same period.
Is Armenia Binance’s backup for leaving Russia?
According to Armen Baldryan, president of Armenia’s Union of Employers of Information and Communication Technologies (UEICT), around 1,300 Russian companies relocated to Armenia until March 2023.
Yandex, Russia’s largest technology company, opened a new office with 400 employees to oversee the company’s work in the CIS region.
With Binance now contemplating moving out of Russia, will Armenia serve as its backup location to service Russians while evading the sanctions?
Faced with pressure from the West, several Russian tech companies have successfully relocated to Armenia. Perhaps Binance wants to cash in on the same opportunity. After all, why give up your business when you can trick the system, right?
