In April 2022, cryptocurrency exchange Binance was the first major trading platform to restrict accounts of users from the Russian Federation. It was about accounts with the equivalent of more than 10 thousand euros, and their owners had to be located in the territory of the state. Such accounts were put in withdrawal mode, i.e. it was forbidden to conduct transactions with them.

In April 2023, it became known that restrictions on the maximum balance amount for wallets had been lifted. The platform said that “the specified limit is no longer in effect”.

The reasons for this decision are unknown. The exchange’s actions seem particularly illogical due to the fact that over the past year, the head of the trading platform Changpen Zhao has repeatedly emphasized how clearly the exchange adheres to the sanctions regime and legislation in general. As an example of this, Zhao talked about both the introduction of mandatory identity verification in the KYC procedure in 2021 and the restrictions on users from the Russian Federation.

Now, the limits have been tentatively lifted, and US authorities have taken an interest in the exchange’s operations.

What is going on with Binance Crypto Exchange?

Information about the launch of the investigation against the exchange was shared by Bloomberg representatives. Relevant rumors were told to journalists by five officials who wished to remain anonymous. According to them, the US Department of Justice’s National Security Division suspects the parent company Binance Holdings Ltd. of failing to comply with sanctions against customers from Russia.

The former has faced unprecedented pressure from the US, EU countries and the rest of the world following Russia's invasion of Ukraine. It is reflected in a record number of sanctions - Russia has surpassed even the DPRK and Iran in this indicator.

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Parallel to the new investigations into Binance, there is also another one – also related to potential sanctions evasion assistance – but only for Iranian nationals.

Binance representatives have published an announcement in which they deny any violation of prescribed rules from US regulators. Here’s a quote from it, cited by The Block.

In 2021, Binance has launched an initiative to completely overhaul its corporate governance structure, including bringing in world-class experienced executives to fundamentally change the way Binance operates globally.

The company also said that the customer identity verification (KYC) procedure on Binance is in line with international standards for a similar procedure in the traditional financial sector. Here’s the new quote.

Our policy includes zero tolerance for dual registrations, anonymous identities and unclear sources of money for exchange accounts.

And that’s not all: Binance was previously sued by the US Commodity Futures Trading Commission (CFTC). The trading platform has been charged with a long list of allegations that concern market manipulation, failure to cooperate with regulators, as well as hiding physical office addresses.

A particularly important detail in the case was the clarification of the agency's position on its management's attitude towards cryptocurrencies. The case file made it clear that U.S. Commodity Futures Trading Commission officials see Bitcoin, Etherium and other popular coins as commodities, not securities. Accordingly, the CFTC's position is exactly the opposite of that of the SEC, who for some reason view digital assets as securities and cause problems for their creators. Read more about the story in a separate story.

Not all investigations lead to formal charges of wrongdoing, but they can take a long time. At the moment, there is no indication that the Ministry of Justice is preparing to reach a settlement with Binance – for example by waiving or delaying the legal process. The company may negotiate the terms of the agreement with the government depending on the circumstances of the case.

In other words, it’s too early to sound the alarm – perhaps Binance management will be able to come to some kind of consensus without any public proceedings. And that would be very good for the exchange itself, because any loud negative news about the largest trading platform significantly affects market dynamics, leading to a fall in the value of Bitcoin and other digital assets. And this is already hurting the business in the form of reduced popularity of crypto, commission revenues and so on.


We believe that this situation is dangerous for cryptocurrency exchange Binance. Still, as the events of February 2023 showed, US regulators can not only restrict the actions of popular trading platforms, but also demand serious fines from them to settle the case. In this case, we can assume that Changpen Zhao's platform will also have to make concessions - and as an option resume the restrictions that have been in place for the past year.


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