In a recent tweet, Changpeng Zhao, the CEO of Binance, shed light on key details of the exchange’s agreement with CommEx, following yesterday’s announcement of the sale of Binance’s entire Russian business to CommEx. Mr. Zhao’s tweet provided valuable insights into the strategic move and the transition process between the two entities.
In his tweet, Mr. Zhao emphasized that cryptocurrency transfers would occur between Binance and CommEx as users gradually migrate their funds. He also noted the possibility of older transactions surfacing during the testing phase of the integration, a common occurrence in such transitions.
A notable aspect of the deal is the potential involvement of former members of Binance’s CIS team with CommEx. Mr. Zhao expressed optimism about this development, highlighting the similarities in design and APIs between the two platforms. These similarities were intentional, aiming to ensure a smooth user experience during the migration process.
Binance’s Strategic Move with CommEx
One key condition of the agreement is that CommEx, which officially launched its exchange on 26 September, will not serve users in the United States or the European Union. Mr. Zhao clarified that this restriction was a term requested by Binance and aligns with the exchange’s compliance strategy and regulatory objectives. He also made it clear that he is not the Ultimate Beneficial Owner (UBO) of CommEx and does not own any shares in the company.
Importantly, the deal excludes any buyback options, setting it apart from other international companies’ deals in Russia. Binance’s decision to sell its Russian business underscores its strategic shift towards focusing on long-term growth in other regions. As announced yesterday, the sale is part of Binance’s compliance strategy, with Noah Perlman, Binance’s Chief Compliance Officer, stating that “operating in Russia is not compatible with Binance’s compliance strategy.”
To ensure a smooth transition for existing Russian users, the off-boarding process is expected to take up to one year, during which all assets of Russian users will remain secure. Binance and CommEx will collaborate to inform users about the asset migration process. A portion of new user registrations from Russia with verified Know Your Customer (KYC) information will be redirected to CommEx, with this proportion increasing over time.
Over the coming months, Binance will gradually phase out all exchange services and business operations in Russia while prioritizing a seamless user experience during this transition period. While the financial details of the deal were not disclosed, it is crucial to note that this marks a complete exit from the Russian market for Binance.
The exchange will not have an ongoing revenue-sharing arrangement with CommEx, nor will it retain any option to repurchase shares in the business. Mr. Zhao’s tweet serves as a valuable update on the Binance-CommEx deal, offering clarity on various aspects of the transition and highlighting the exchange’s commitment to compliance and user satisfaction as it adapts to the evolving cryptocurrency landscape.
