Binance Delisting Sanctioned Russian Banks of P2P Platform
Binance's P2P platform under scrutiny for association with sanctioned Russian banks. Swift action taken, but concerns remain.
Binance, one of the leading crypto exchanges, recently found itself in the spotlight for its association with sanctioned Russian banks on its peer-to-peer (P2P) platform.
Binance's P2P platform serves as a bridge between buyers and sellers of cryptocurrency. Unlike the main exchange platform, where transactions are more direct, the P2P platform operates as a message board, allowing users to post offers to buy or sell cryptocurrency. While it does function as a crypto escrow service, fiat transactions are left to the discretion of the users, ensuring no fiat money traverses Binance's servers.
Sanctioned Russian Banks on Binance P2P
On August 22nd, The Wall Street Journal highlighted that Binance's P2P platform listed sanctioned Russian banks, specifically Tinkoff and Rosbank, as potential transfer methods. This revelation led to concerns that Binance might be indirectly violating international sanctions by endorsing these banks.
In response to the growing concerns, Binance took swift action. By August 24th, multiple reports confirmed that the exchange had removed these banks from its list of payment methods. However, a twist in the tale emerged when these banks reappeared on the platform, albeit disguised as code words "yellow" for Tinkoff and "green" for Rosbank.
By August 25th, Binance had removed both the direct mentions of the banks and their coded counterparts from its platform. Currently, Binance's P2P platform offers sixteen payment methods for Russian ruble conversions to crypto. Notable options include Raiffeisenbank, Russian Standard Bank, Payeer, and AdvCash. However, Tinkoff and Rosbank, along with their coded counterparts, are conspicuously absent.
P2P crypto platforms have always been a topic of debate. Advocates argue that they are essential to counteract government payment censorship. On the other hand, critics believe they can be exploited by malicious actors to move illicit funds.
Before 2023, LocalBitcoins was among the most popular P2P platforms. However, its shutdown led many of its users to migrate to Binance's P2P platform. The recent controversy surrounding Binance underscores the challenges these platforms face in ensuring they remain compliant while serving their user base.
Paxful's co-founder, Ray Youssef, recently weighed in on the debate, suggesting that current P2P platforms are still too centralized and vulnerable to government interventions. He is currently working on a new platform, "Civ Kit," which he believes will be more resilient to potential shutdowns.