Ukrainians boycott Binance: the crypto community is outraged by the exchange’s cooperation with Russia and Iran

Major Ukrainian crypto exchanges refuse to trade Binance’s own token – BNB, and the state is called on to cancel any cooperation with the company. All because of Binance’s ties to Russia and Iran, despite the sanctions directed against these two countries.

Binance VS Ministry of Digital of Ukraine

On November 9, Binance announced the expansion of cooperation with the Ministry of Digital Transformation of Ukraine and the possible launch of cryptocurrency payments for government services.

Криптовалютна біржа Binance та Мінцифра опрацьовують можливість інтеграції оплати криптовалютами за допомогою Binance Pay за державні послуги, зокрема в «Дії». Про це ForkLog UA розповів генеральний менеджер @BinanceUkraine Кирило Хом’яков. https://t.co/gemuaXlH1M

— ForkLog UA (@ForklogUA) November 8, 2022

The organizations have previously cooperated: in September, Binance added verification through “Diia” for new users. Also, as part of the IT Generation project, at the end of June, the Ministry of Digital and Binance began accepting applications for free training in IT specialties, and in August, the number of places under the program was increased from 1,000 to 1,830. As part of the partnership, Binance Charity allocates $1 million in BUSD to provide scholarships.

So far, the partners have also announced the expansion of educational projects to Web3, blockchain and cryptocurrencies.

It would seem that the news is not bad, but there is a “but”. Binance has long been tried to “bring to its senses”, pointing to its incomprehensible ties with Russia and Iran, which continues to supply weapons to the aggressor. So the announcement of further cooperation of the crypto exchange with the state organizations of Ukraine even more outraged representatives of the local crypto community, who began to boycott Binance.

Boycott crypto exchange

BlockSoftLab CEO Vadym Hrusha created a petition to the President of Ukraine, Volodymyr Zelenskyi, demanding to “block the integration of Binance into the Ministry of Digitization application.” The appeal is still being moderated, but Forbes journalists partially published its content:

Dear Mr. President, please block any actions regarding the integration of Binance solutions into Action. Binance is a member of the Russian Bank Association and “serves Russians for hundreds of millions of dollars every day.”

The author of the petition proposes to block the operation of the company in Ukraine until Binance fulfills the conditions of international sanctions against Iran and does not cut its ties with Russia.

Grusha himself has already canceled trading of BNB (Binance’s own token) in the Trustee Plus crypto-neobank created by BlockSoftLab. The businessman claims that the business will lose about 6% of income from this, the rejection of the ruble at the beginning of the full-scale invasion of the Russian Federation cost more – about 60% of the price.

The oldest Ukrainian stock exchange, Kuna, also closed BNB trading and blocked the possibility of entering funds from November 9. And yesterday, WhiteBIT joined the boycott, officially announcing the withdrawal of Binance tokens from the exchange:

“We are starting the process of removing Binance Coin (BNB) from the exchange. Access to the top-up has already been closed. Trading on all BNB pairs will be closed on November 11th at 12 UTC. Withdrawal access will be closed on November 17th at 12 UTC. All BNB holders will receive details and instructions by email.”

Binance’s “Dangerous” Connections

Since 2018, Binance has processed a total of $7.8 billion in Iranian transactions – in defiance of US sanctions aimed at shutting Iran off from the global financial system. The scale of Iranian crypto flows and their duration became known against the background of the investigation of the US Department of Justice into the “laundering” of money by the company Binance (which dominates the crypto industry with a capital of 1 trillion dollars and has more than 120 million users).

Iran supplies weapons to Russia — Binance also continues business relations with the aggressor country.

According to Bloomberg sources, Russia was among the top five Binance markets in the world with a total of about 10 million accounts. At the start of the full-scale incursion, Binance CEO Changpeng Zhao said the crypto exchange had complied with initial international government orders to restrict those under sanctions, but said further expansion would be “unethical.”

In April 2022, the fifth package of European sanctions was announced, after which Binance restricted the withdrawal of funds for Russians from its services (in particular, those with assets with a total value of more than €10,000). Bloomberg sources estimate that fewer than 50,000 people actually have accounts above that amount.

The eighth, tougher package of EU sanctions was adopted in October and included a ban on the provision of crypto wallet services, accounts or storage services for crypto assets to Russians, regardless of the amount of assets.

According to Forbes, Binance currently has 18 ruble trading pairs and I/O gateways that allow for easy circumvention of sanctions.

What threatens Binance

This week turned out to be a tumultuous one for the crypto exchange. Binance was originally going to rescue Sam Bankman-Fried’s FTX, which was facing a liquidity crisis. The owners even signed a non-binding “letter of intent,” but Zhao changed his mind about the deal after reading FTX’s filings.

Bloomberg writes that the management of FTX faced a “financial black hole” – a gap between liabilities and assets in the crypto exchange, which, according to the publication’s sources, is probably more than $6 billion.

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.

— Binance (@binance) November 9, 2022

At the same time, bitcoin fell 9.9% to $16,853, bringing its decline this week to almost 20%.

Experts interviewed by Forbes journalists say that the boycott is more of an “expression of a political position” than an attempt to put pressure on business.

“In my opinion, Binance will not feel this in the general turnover”, – says CEO of the crypto-processing service CrossPay Dmytro Malyukov.

Mykhailo Chobanyan, the founder of Ukraine’s first cryptocurrency exchange KUNA, does not hide the political undertones and calls on the exchange to choose one side.

“Binance has to decide whether it works in Russia and Iran or whether it works in Ukraine,” he says.

The Ministry of Statistics promises to make an official statement on October 14.