Binance Takes Action on Sanctioned Russian Banks Controversy in Peer-to-Peer Service
Summary:
Binance removes sanctioned Russian banks as code words from its peer-to-peer service following criticism. Users found ways to continue using these payment methods, raising concerns about bypassing sanctions. The controversy highlights the debatable nature of peer-to-peer crypto marketplaces.
Cryptocurrency exchange Binance has taken action following criticism for using code words "yellow" and "green" to represent sanctioned Russian banks in its peer-to-peer service. These payment options have now been removed, as confirmed by Cointelegraph on August 25. Binance's peer-to-peer exchange service allows users to buy or sell cryptocurrency through a message board system and acts as a crypto escrow service. Unlike Binance's main exchange platform, it does not handle fiat payments directly, leaving them to be handled by users themselves. However, The Wall Street Journal reported on August 22 that Binance listed sanctioned Russian banks, including Tinkoff and Rosbank, as transfer methods, leading to concerns about potential violation of sanctions. Russian news outlets reported on August 24 that Binance had removed these banks from the list, only for them to later reappear as code words ("yellow" representing Tinkoff and "green" representing Rosbank). The Wall Street Journal later reported on August 25 that the sanctioned banks were indeed removed from the list, quoting a Binance spokesperson who stated that the removal occurred after the exchange became aware that account holders were using the service to circumvent sanctions. The spokesperson explained that Binance regularly updates its systems to comply with regulatory standards and addresses any identified gaps promptly. Cointelegraph also confirmed on the same day that the "yellow" and "green" payment methods had been removed. While 16 other payment options for converting the Russian ruble to crypto are still available on the platform, including Raiffeisenbank, Russian Standard Bank, Payeer, and Adv Cash, Tinkoff and Rosbank, as well as their code word equivalents, are no longer on the list. However, despite their removal, some Binance P2P users have continued to advertise sales with "the green bank" as their payment method, even though they list alternative payment methods in the "payment method" field. These users explicitly state within the "advertiser's terms" that they only accept transfers using "the green bank." This loophole has allowed users to continue utilizing Binance P2P to sell cryptocurrency using sanctioned payment methods. Peer-to-peer crypto marketplaces have been a subject of controversy, with arguments for their necessity to prevent government payment censorship countered by concerns about criminal involvement in moving illicit funds. LocalBitcoins, one of the most popular such marketplaces, was shut down earlier this year, leading some users to migrate to Binance P2P. Ray Youssef, co-founder of Paxful, has expressed on August 25 that P2P marketplaces are still too centralized and susceptible to government shutdowns. He is currently developing a new marketplace called "Civ Kit," which he claims will be much more difficult for governments to close down.
Published At
8/25/2023 7:01:01 PM
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