Binance Blocks Transactions with Mastercard and Visa Cards Issued in Russia

Binance Blocks Transactions with Mastercard and Visa Cards Issued in Russia

 

One of the largest Crypto exchanges, Binance has blocked transactions with Mastercard and Visa cards issued in the Russian Federation. The trading platform announced the move after the American payment giants decided to halt operations in Russia over its military invasion of Ukraine.

All the transactions initiated with Mastercard and Visa cards issued in Russia will be unavailable on Binance trading platforms. The world’s largest cryptocurrency exchange by trading volume explained this is due to the U.S. payment processors’ decision to suspend their activities in the Russian Federation.

The platform further noted that all transactions initiated with Mastercard and Visa cards issued by financial institutions outside of Russia will be unavailable on Binance within the country, also in line with the policy changes announced by the two financial services corporations.

But on the Russian side, the supposedly borderless form of money has instead collided with the reality of international sanctions spurred by a major European conflict — and also the moral question of whether participants in the crypto markets could unwittingly help fuel a war of aggression or help Russian oligarchs preserve their wealth.

Crypto in recent years has moved from a fringe technology to the kind of mainstream industry that pushes multiple Super Bowl ads from companies backed with hundreds of millions of dollars of investment. The underlying blockchain technology relies on distributed computing power to create public and unbreakable digital ledgers that can track who owns what without a central authority.

At the start of the sanctions against Russia, one of the most strident statements came from Binance, the world’s largest crypto exchange. Earlier in March, its founder and CEO Changpeng Zhao stated the exchange was following sanction rules without limiting access for ordinary Russian citizens that are not on the sanctions lists. But all that was toned downed to a striking different tone, in a 1,500-word blog post by the company CEO Changpeng Zhao who clarified that they would follow the same sanctions rules as the banks.

Other major exchanges had also clarified that they would comply with U.S. and European sanctions. The U.S. Treasury Department has not accused any exchange of being out of compliance. Experts have said that Russian President Vladimir Putin won’t be able to use virtual currency to evade sanctions on a large scale, because even at $2 trillion the crypto market isn’t big enough and crypto exchanges have compliance departments dedicated to catching money laundering.

“We have a number of sophisticated tool sets that allow us to understand who are sanctioned individuals, sanctioned nations, to be able to track cryptocurrency and fiat deposits and withdrawals, and make sure that we block those users, as we have been doing since our inception,” Brett Harrison, the president of FTX exchange had told CNBC.

The restrictions apply only to Binance’s crypto-to-fiat service, a representative of the company, Forklog has clarified. He also, elaborated that ‘Traders will still be able to use Russian cards in peer-to-peer transactions, except those issued by banking institutions placed under sanctions.’

This is to recall that amid an ongoing Russian military assault on Ukraine, Kyiv had issued a call on crypto exchanges to freeze the accounts of all Russian users. While some platforms, such as the U.S. Coinbase and the South Korean Upbit and Bithumb have imposed restrictions, major global exchanges like Binance and Kraken had denied the request to unilaterally freeze the accounts of all Russia-based users.

As the West moves ahead in expanding their financial sanctions on Moscow, Russians have turned to the digital assets market with reports revealing a spike in Russian ruble trading, including on Binance.

Binance has also been actively involved in the financing of humanitarian efforts in Ukraine. The exchange announced the donation of $10 million for the Ukrainian people suffering from the military conflict and the Binance Charity Foundation gave Unicef $2.5 million worth of cryptocurrency.