Binance has announced its decision to divest its Russia business to the newly-established exchange, CommEX, further underlining the trend of companies disengaging from Moscow in the wake of the ongoing conflict in Ukraine.
Binance has chosen not to divulge the precise financial intricacies of this pivotal transaction.
Furthermore, the company has unequivocally stated that it will not retain any continuous revenue participation stemming from this sale, nor does it harbour any intentions of reacquiring shares in the divested enterprise.
The welfare and security of Binance’s existing Russian user base remain a top priority.
The company, as well as Changpeng Zhao (CZ), has reassured its users that their assets will remain intact, and an organised transition process is being charted.
This divestment process is expected to unfold over the course of up to one year, ensuring a seamless transition for all parties involved.
CommEX, the recipient of Binance’s Russian business, stands as a centralised cryptocurrency exchange supported by crypto venture capitalists, as outlined on its official website.
Remarkably, CommEX made its debut in the exchange arena just a day prior to this transaction’s announcement.
However, as of now, the company has not issued any formal comments regarding the acquisition of Binance’s Russian business besides a post on X (formerly known as Twitter) in response to Binance’s post.
This divestiture falls in line with a broader pattern, where numerous Western companies, including industry giants such as Renault, Shell, and McDonald’s, have either opted to divest their Russian holdings or have taken steps to empower local management in response to sanctions imposed due to the Ukraine conflict and amid potential threats of asset seizures by the Russian government.
Binance and CommEX intend to collaborate closely to facilitate a smooth transition for users, ensuring that assets can be seamlessly migrated to CommEX.
In this regard, a proportion of new user registrations in Russia, subject to Know Your Customer (KYC) procedures, will be redirected to CommEX, with plans to progressively scale up this transition process.
Over the coming months, Binance will gradually phase out all exchange services and business operations in Russia, making every effort to uphold a seamless and user-friendly experience throughout this transformative period.
While precise financial details of the transaction remain undisclosed, it is imperative to underline that this move represents Binance’s complete withdrawal from the Russian market.
Notably, in stark contrast to similar arrangements undertaken by international companies in Russia, Binance has chosen not to retain any ongoing revenue-sharing arrangements from the sale, nor has it retained any options to reacquire shares in the divested entity.
This strategic decision underscores Binance’s commitment to exiting the Russian market entirely.
Noah Perlman, Binance’s Chief Compliance Officer, said:
“As we look toward the future, we recognise that operating in Russia is not compatible with Binance’s compliance strategy. We remain confident in the long-term growth of the Web3 industry around the world and will focus our energy on the 100+ other countries in which we operate.”