Crypto exchange Binance responded to reports about the transfer of user data to the security forces

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A representative of the largest crypto exchange Binance called “categorically false” information from the Reuters material that the site transferred any user data, including Alexei Navalny, to FSB-controlled bodies and Russian regulators. To prove this, the exchange attached to the official statement correspondence with Reuters correspondents, explaining that “they spent weeks providing answers to each of the 29 questions, only for the reporters to ignore those parts of the answers that contradicted their narrative.”

Earlier, Reuters reported that the head of the company for Eastern Europe and Russia, Gleb Kostarev, agreed to transfer customer data so that the Russian financial intelligence service, Rosfinmonitoring, could track the cryptocurrency that was transferred in support of the opposition. The article notes that during a meeting between representatives of Rosfinmonitoring and Kostarev in April 2021 in Moscow, the Russian side wanted Binance to agree to provide them with user data, including names and addresses, to fight crime. Based on Kostarev’s internal messages to a business partner, the agency concludes that Binance user data was needed to investigate donations to Alexei Navalny (FBK; recognized in Russia as an NPO-foreign agent and a banned extremist organization, liquidated by a court decision).

Kostarev agreed to Rosfinmonitoring’s request because he didn’t have “a lot of choice in this matter.” Binance has agreed with Rosfinmonitoring to create a local division in Russia, through which the authorities will be able to request customer data, Kostarev’s messages show, seen in Reuters.

Reuters cites text messages that Kostarev sent to people outside the company. The agency also conducted ten interviews with people familiar with Binance’s activities in Russia, including former employees, former business partners, and members of the crypto industry, the article notes.

Kostarev himself on his Facebook page (owned by Meta, recognized as extremist in the Russian Federation and banned) called the statement about the transfer of data a lie, adding that neither he personally nor Binance had ever “leaked” user data to Rosfinmonitoring or the FSB.

Binance can transfer user data at the request of the government or law enforcement agencies, if there are appropriate legal reasons for this – such rules apply to all jurisdictions and are part of a regulated business, a site representative told Vedomosti. At the same time, the crypto exchange did not conclude any “unusual agreements” with the Russian government, which would differ from any other legal norms in another country, he specified.

On April 21, Binance announced that it was restricting access to trading and depositing funds to an account for users from Russia. The restrictions will affect those who own crypto assets worth more than 10,000 euros. The only available service for such clients is the withdrawal of funds. If the amount of the account balance or open positions in futures or derivatives of such investors exceeds 10,000 euros, the exchange will give them 90 days to close transactions and withdraw funds, the exchange informs in notifications to users. The message of the exchange specified that the restrictions would not affect Russians living abroad. Such clients need to pass an address confirmation check (Proof of Address), after which the account will remain unaffected and active, RBC wrote .

Binance explains its decision with the fifth package of EU sanctions against Russia: the exchange is obliged to limit services for Russian citizens, investors living in the country and legal entities registered there. The crypto exchange has no plans to stop working in Russia yet, but will support new sanctions if the international community so requires, the report says.

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