A substantial portion of Binance’s Russian clientele has transitioned to alternative platforms, extending beyond just the exchange’s new owner, CommEx, according to a recent report. This shift is evident from the reduced activity observed in peer-to-peer (P2P) operations, as highlighted by Dmitry Stepanin, the CEO of Satoshkin, during a recent interview with the local news outlet Kommersant.
Stepanin further noted that professional P2P traders have reported declines ranging from 10% to 30%. At the outset of 2023, Binance featured approximately 7,700 ruble P2P transaction advertisements daily. However, this figure dwindled to 6,300 by mid-year and plummeted to 3,400 by the end of September. As of October 3, there was no available data on ruble transactions on the Binance platform.
According to Stepanin, a majority of crypto traders have migrated to the ByBit exchange, which has been actively promoting its services. Additionally, other exchanges akin to Binance, including Huobi, Bitget, KuCoin, and Gate.io, are also expected to attract increased user inflows. Data from P2P.Army, an analytical service for P2P arbitrage and arbitrage between crypto exchanges, illustrates a consistent growth in active advertisements on these alternative exchanges. For instance, Huobi had 3,900 to 4,000 advertisements in the first half of the year, which increased to 4,300 in September and surpassed 4,500 in early October. Bybit experienced a rise from 1,800 advertisements in the first half of the year to over 2,700 in October.
One million users from Binance are expected to transition to CommEx.
He anticipates that approximately one million users will make the transition to CommEx.
An independent financial analyst, Andrei Barkhota, has estimated that there were at least 700,000 registered Russians on the Binance platform.
Binance itself has not officially disclosed the precise number of its Russian clients.
The migration of clients from Binance to CommEx will unfold in a phased manner.
Presently, users have the option to log into CommEx using their Binance account, albeit with only basic Know Your Customer (KYC) information and login credentials being shared.
Within a week’s time, complete KYC data transfers will become feasible, according to Toroptsev.
The commencement of asset transfers currently depends on individual users.
CommEx offers three options: users can either persist with Binance and await further updates, register a CommEx account using their Binance data, or create a new account on CommEx and move their assets from Binance at a later stage.
The transition process is expected to span one to three months, as estimated by Barkhota.
Binance Withdraws from the Russian Market Due to Regulatory Pressures
The principal factor behind Binance’s departure from the Russian market can be attributed to pressure exerted by U.S. regulators.
The exchange had been facing allegations related to money laundering and the circumvention of sanctions through its platform.
Binance had gradually implemented restrictions on Russian users, including limiting wallet holdings to $10,000 in 2022 and prohibiting the acquisition of foreign currencies on its peer-to-peer platform.
This year, the exchange enacted a ban preventing Russians from trading cryptocurrencies with any currency other than the ruble.
Significantly, Binance was estimated to earn between $400 million to $500 million annually from its Russian clientele, as indicated by Barkhota.
Sergei Mendeleev, the leader of InDeFi Smart Bank, asserted that Binance is not entirely departing from the Russian market but is instead rebranding to facilitate smoother operations with Russian users.
There have been speculations regarding Binance’s ownership of CommEx due to the discreet nature of the agreement and the fact that the exchange was only a few days old.
However, both Changpeng Zhao and CommEx have refuted these allegations.