Binance Leaked Sensitive Data to Russian Authorities

In particular, it states that in 2021 Binance's head of Eastern Europe and Russia, Gleb Kostarev, consented to Rosfin's request to agree to share client data, enabling the agency to trace millions of dollars in bitcoin sent to jailed Russian opposition leader Alexei Navalny.

Although nominally independent, Rosfin acts as an arm of the Federal Security Service responsible for combating money laundering and terrorist financing. Navalny’s key organization was recognized to be a terrorist group by the Russian authorities in 2021 who use this circumstance as an excuse for requesting sensitive data while claiming that it thoroughly complies with international standards of operational independence in areas including regulating the activities of virtual assets service providers.

Although representatives of Binance insist that their cooperation with the authorities is within legal limits, the company’s overall behavior suggests otherwise.

The exchange has sought cooperation with the Russian authorities to get access to its markets. Over the years, it has grown to dominate the market and has become a go-to source for many Russians after it launched an all-out war on Ukraine on Feb.24.

Unlike many other companies, including PayPal, American Express, and EXMO.com, which have shut down their operations in Russia because of the aggression, the exchange decided to remain.

One of Kostarev’s recent messages says that Binance's priority was to ensure the market stayed open, so the exchange wasn't “making a fuss.” The exchange’s representatives also claimed that the war and economic crisis could be of use for working-class Russian citizens looking for alternative payment means.

On Binance's Russian Telegram group, so-called Binance Angels, who act as volunteer customer representatives, endorsed messages asking Binance not to “fall for this war crap.” The exchange also plays the neutrality card, saying that “Binance does not interfere in politics.”

While Binance told users it was limiting services for major clients in Russia because of the latest European Union sanctions on Moscow, it is not willing to unilaterally “freeze millions of innocent users' accounts.” Data from CryptoCompare data shows Binance's average daily volume for rouble transactions in the first three weeks of the war was close to four times higher than during the month before.

Binance CEO Changpeng Zhao, commonly known as CZ, first visited Russia in October 2019, urging Russians to stop being a “slave” to the traditional finance system.

Recently, his exchange has also received praise from Russian lawmakers. On March 14, MP Alexander Yakubovsky from Putin’s party “United Russia” called Binance the “leading experts in our country” advising politicians on crypto regulation, adding that the company “is under strong pressure from countries unfriendly to Russia.”