There are now clearer indications of why Binance exposed its client data to Russia’s top financial intelligence. A detailed study by the renowned new agency, Reuters, revealed that Binance CEO, CZ, and Russia’s financial intelligence agency (the FSB) had developed a close relationship over the past 12 months.
CZ’s Meeting With The FSB
According to Reuters, CZ and FSB chiefs (aka Rosfinmonitoring) first met in April 2021. At that meeting, FSB requested client information from Binance. The agency had claimed that it needed Binance’s client details, particularly names and addresses, to assist the country’s quest to become a crime-free nation.
However, inside sources revealed to Reuters that the FSB was particularly interested in a certain individual known as Alexei Navalny, who has since been jailed. Coincidentally, during this period, the FSB included Navalny’s organization among its list of terrorist groups.
Navalny became an enemy of the government when he declared for the presidency and received nearly $27M worth of BTC in campaign donations to help his presidential ambition. Despite being jailed, Navalny’s campaign fund continues to receive more donations in crypto. However, Navalny’s response to the witch-hunt was that he was attempting to obtain financial transactions that could expose the corrupt actions of top government officials in Putin’s administration.
An anonymous Binance business associate told Reuters that Gleb Kostarev (Binance’s CEO for eastern European operations) signed off the approval for Binance to disclose client data to Russia’s FSB. Kostarev revealed to this Reuter’s insider that he “didn’t have a say in the matter,” and his only option was to agree to the demands from the FSB.
Binance Refutes Any Allegation Of Misconduct
When Reuters contacted Kostarev for him to explain his position on the matter, he declined comments. Binance issued an official statement saying, “it never revealed any sensitive client info to any Russian agency.”
The crypto exchange further stated that its reason for having continuous meetings with Russia was to obtain an operational license from the regulatory body. The exchange also claimed that the war between Russia and Ukraine has since ended any meeting between the firm and Russian authorities.
It added that the exchange wouldn’t hesitate revealing client data to any government agency that requests it so long there isn’t any illegality involved in such requests. Binance might have a point there, as its CEO has continually condemned the decision of Russian authorities to ban Russians who owns private digital currencies.
Nevertheless, Binance has suspended all Russia-based user accounts with more than $11K in their crypto wallets. Also, as part of the economic sanction meted out to Russia by the EU and other nations because it waged war against Ukraine, many FinTech, including payment processors, like Mastercard, have suspended their operations in the Eastern European nation. It is noteworthy that Binance never ceased operations in Russia despite many other companies leaving the country because it invaded its less powerful neighbor, Ukraine.
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