- Binance exchange will no longer let clients pay one another through certain banks in Russia.
- The exchange had been accused of helping the country’s citizenry move crypto worth $428 million monthly.
- The exchange has attributed the move to a regular system update in compliance with local and global regulatory standards and sanctions rules.
Binance has resolved to delist several Russian banks from its peer-to-peer (P2P) service only three days after reports that the exchange was helping the country’s citizenry to move a monthly sum of $428 million. Considering the US sanction against Russia still stands, the exchange broke the law by facilitating the transactions.
Binance ends P2P services with select Russian banks
Binance will no longer offer its P2P services to five select banks in Russia, all sanctioned, after a longstanding business with the financial institutions moving millions of dollars worth of Rubles through the service.
In a statement to CoinDesk, a Binance representative said that the exchange would “remove any payment methods on the Binance P2P platform that do not fit with our compliance policies.”
The exchange had been accused of concealing the identities of these banks, transacting with them despite the sanctions imposed against them. To keep the transactions under wraps, the exchange had color-coded these banks, with the bank cards for Sber and Tinkoff being “green” and “yellow” local cards on its payment options for P2P trading.
In so doing, Binance users would openly transact and process payments through banks without regard to the stern sanctions imposed by the West against Russia’s financial system.
It should be noted that Binance denied all allegations that it had relationships with the sanctioned banks, citing full compliance with global sanctions. While the exchange has attributed the move to a regular system update in compliance with local and global regulatory standards and sanctions rules, it does not absolve it from the regulatory clampdown.
Potential consequences of breaking sanctions
Nevertheless, terminating services to the sanctioned banks and delisting them from the platform does not mean the exchange has escaped what could follow as consequences for breaking the sanctions.
On the contrary, it could make matters worse, considering the exchange is still facing regulatory attack from the US authorities among other jurisdictions.
As indicated, Binance is still at the center of a regulatory clampdown from both the US Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC).
The new finding could worsen its current situation, giving the US Department of Justice (DOJ) more cause to crack down on the exchange and its CEO, Changpeng Zhao, who is accused of contravening anti-money laundering regulations.
Open Interest, funding rate FAQs
How does Open Interest affect cryptocurrency prices?
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
How does Funding rate affect cryptocurrency prices?
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
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