Crypto giant Binance hopes Russia will help regional growth

Representations of the cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple and Litecoin are seen in front of a Binance logo displayed in this illustration taken June 28, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

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MOSCOW, Jan 27 (Reuters) – Binance, the world’s largest cryptocurrency exchange, is keen to expand in Russia and neighboring states where it sees prospects of new regulations that will boost its business, an official said.

Russian politicians have been pushing for a change of course from the central bank, which has proposed restricting cryptocurrency trading and mining over fears it could lead to financial instability. They say it should instead regulate a company that could get more tax revenue.

President Vladimir Putin has called on the central bank to find consensus on how to handle the cryptocurrency industry, which central banks and regulators around the world have struggled with.

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“Our goal is to obtain a license and to conduct legal activities where regulations allow it,” Binance’s director for Eastern Europe, Gleb Kostarev, told Reuters, adding that his company hopes for an approach. Russia’s progressive regulatory regime that could influence the approach taken by its neighbours.

Kostarev said Russia, where the central bank says annual cryptocurrency trading volume is around $5 billion, was strategically important for Binance.

He called the central bank’s proposals to restrict trade tough, adding: “For now, we see this as an invitation to dialogue with the regulator.”

Russia has opposed cryptocurrencies for years, saying they could be used to launder money or finance terrorism. It gave them legal status in 2020 but banned their use for payments.

Kostarev said Russia’s approach could now help determine how other countries in the region deal with cryptocurrencies.

“In Ukraine, Kazakhstan and Uzbekistan, they are more loyal to cryptocurrencies and take steps towards liberalization rather than restriction,” he said. “But local regulators are taking these steps with an eye on Russia.”

The global hashrate, which refers to the computing power used by computers connected to the bitcoin network, was reduced by around 20% this month due to political unrest and power outages in Kazakhstan, Binance estimated. Read more

Kostarev said the rate was recovering.

A Reuters investigation last week showed Binance withheld information about its finances and corporate structure from regulators, even as it welcomed government oversight and praised its anti-money laundering program. silver.

A Binance spokesperson responded by saying the company supports “technology and legislation that will put the crypto industry on a path to becoming a well-regulated and secure industry.”

The investigation also revealed that Binance had acted against its own compliance department by recruiting clients in Russia and six other states deemed to pose an “extreme” money laundering risk.

Binance said it has “one of the most sophisticated approaches” to applying anti-money laundering and anti-terrorist financing in the financial industry and internal risk ratings have been adjusted based on a range of variables .

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Reporting by Elena Fabrichnaya; Additional reporting and writing by Alexander Marrow; Editing by Edmund Blair

Our standards: The Thomson Reuters Trust Principles.

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