Russian Crypto Offshoot CommEx to Shutter Amid Binance Legal Woes

Binance's Russian successor, CommEx, has announced its impending shut down and has suspended deposits. After acquiring Binance's Russian operations in September 2023, CommEx will gradually close its platform, with futures trading ceasing on March 28 and the website being suspended by May 10. The exchange's mysterious deal with Binance, which involved former Binance staff, sparked speculation that it was a "Russian version" of Binance.US.

CommEx, the Russian Offshoot of Binance, Announces Closure and Halts Deposits

Moscow, Russian Federation - CommEx, the Russian cryptocurrency exchange that acquired Binance's operations in the country in 2023, has officially announced its impending shutdown and suspension of deposit services.

In a notice posted to its Telegram channel on March 25, CommEx informed its users of the gradual suspension of operations on its platform, effective immediately. The exchange urged users to promptly withdraw their assets to external wallets.

According to the company's provided roadmap, CommEx will cease futures trading on March 28, followed by the gradual suspension of peer-to-peer exchange services starting April 2. On April 23, the spot trading platform will be indefinitely closed, and the website is set to be deactivated by May 10.

"User accounts that retain assets after May 10, 2024, will be subject to an asset management fee of 1% of assets," the announcement stated.

Binance's Mysterious Russian Exit

CommEx's closure comes amidst scrutiny of Binance's operations in various jurisdictions. In September 2023, Binance announced its intention to exit the Russian market following the departure of its top local executives, including the vice president of Eastern Europe, Gleb Kostarev.

Weeks later, Binance confirmed the sale of its entire Russian business to CommEx, a newly established exchange. However, details regarding the founders and executives of CommEx remained undisclosed.

Subsequent statements from CommEx emphasized its independence from Binance, although it acknowledged that some of its core members had previously worked for the global cryptocurrency giant.

The opaque nature of the deal sparked speculation among Russian crypto enthusiasts, who noted similarities between the websites of Binance and CommEx, leading to the characterization of the latter as a "Russian version" of Binance.US.

At the time of the sale, Russia constituted the top market for Binance.com in terms of user visits, accounting for approximately 6.9% of total traffic.

Legal Woes for Binance and Former CEO Changpeng Zhao

The Binance-CommEx deal occurred as former Binance CEO Changpeng Zhao and the exchange faced legal challenges in the United States. In June 2023, the Securities and Exchange Commission (SEC) filed a lawsuit against Binance, alleging the sale of unregistered securities and illegal operations within the United States.

In the wake of the SEC's lawsuit, Zhao resigned from Binance and pleaded guilty in November 2023. He remains on bail in the United States with a $175 million bond after a judge denied his request to travel to the United Arab Emirates to visit family. Zhao's sentencing, initially scheduled for February 2024, has been postponed to late April.

Global Scrutiny of Binance

CommEx's closure coincides with increased global scrutiny of Binance's operations. On March 25, the Philippines blocked local user access to Binance due to concerns over the company's unlicensed activities within the country.

The international scrutiny of Binance is expected to continue, with regulators in multiple jurisdictions examining the exchange's compliance with local laws and regulations.