CommEX, a crypto exchange that recently took over Binance’s operations in Russia, has shocked its users by announcing its decision to cease operations in the country. This move comes after Binance’s exit from Russia, which was initially announced in September 2023. The withdrawal process was expected to take approximately one year to complete, but CommEX has surprised everyone by speeding up the timeline.
CommEX Russia recently posted on its platform that it will gradually wind down its operations starting March 25. The exchange will stop accepting new user registrations, halt asset transfers from Binance, and cease accepting deposits in both fiat and cryptocurrencies on that day. Following this, by March 28, there will be a winding down of opening positions for simple futures and futures trading. The publication of new advertisements on the P2P marketplace will also come to an end by April 5. Subsequently, all P2P orders and advertisements will be automatically closed by April 18, followed by the closure of all trading pairs on simple and classic futures by April 23. Ultimately, the spot market will be closed by May 10, leading to the official website becoming inaccessible to users.
One month into CommEX taking over Binance’s Russian business, local clients started switching to other platforms, leaving the exchange struggling. The peer-to-peer (P2P) trading activity of the exchange experienced a significant decline of 10% to 30%. Binance’s daily ruble P2P transactions also saw a sharp decrease throughout 2023, from 7,700 at the beginning of the year to 3,400 by September. This decline in user activity coincided with Binance discontinuing all Russian ruble (RUB) services on January 30, 2024, as part of its overall exit strategy from the Russian market.
Roman Nekrasov, co-founder of the ENCRY Foundation, shed some light on the possible reasons for Binance’s and subsequently CommEX’s exit from Russia. According to him, pressure from U.S. regulators accusing the exchange of money laundering and sanctions evasion played a significant role in their decision. Additionally, Binance had imposed several restrictions on Russian users, including limiting holdings to $10,000 and restricting transactions to rubles. Despite these challenges, the exchange reportedly generated annual revenues of $2 to $4 billion from its Russian user base.
The exit of CommEX from the Russian market, following in the footsteps of Binance, signals a significant shift in the cryptocurrency exchange landscape. The rapid winding down of operations and the subsequent impact on users highlight the challenges faced by these platforms in navigating regulatory pressures and maintaining user trust. As the crypto industry continues to evolve, exchanges like CommEX will need to adapt quickly to changing market dynamics to ensure their long-term sustainability and relevance.
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