EXMO, a London-based cryptocurrency exchange that used to be one of the fiat on-ramps for users in Russia and Eastern Europe, is cutting ties with Russia to avoid the damaging association after the country invaded Ukraine, the company said in a blog post on Monday.
"After careful consideration and evaluation of the company structure, we arrived at a conclusion that serving Russian and Belarusian clients will prevent us from maximizing our strengths and performing better. In this current climate, which is highly uncertain, we must prioritize our adaptability by following a more rigid strategy," the blog post reads.
The announcement goes on to say that EXMO "decided to sell the digital assets business in Russia and Belarus."
EXMO is also giving up its users in Kazakhstan since the new owner is based there. The structure of the deal is unclear, as EXMO hadn't been operating as a separate legal entity in Russia. Maria Stankevich, EXMO's chief business development officer, told CoinDesk that what's being sold is "around a million users, software, intellectual property and [much] more."
A Kazakhstan-based EXMO RBK LTD. will pick up serving the users in Russia, Belarus and Kazakhstan, according to the announcement, on a separate website, EXMO.me. At this point, the interface of EXMO.me fully replicates that of EXMO.com.
The buyer, whose name EXMO didn't disclose, is "a Russian-based software development company, which was one of the vendors to provide engineering services to EXMO during the last three years," according to the blog post.
EXMO will stop on-boarding new users in Russia, Belarus and Kazakhstan. Russian ruble trading pairs were disabled on EXMO.com on Apr., 15, the company said.
In addition, Edward Bark, one of EXMO's founders with Russian citizenship, is leaving the company and transferring his stake to Serhii Zhdanov, EXMO.com's current CEO. Bark used to own 37.51% of the company, and so now Zhdanov owns a share that is "slightly" bigger than other shareholders, Zhdanov said. (EXMO Group operates several legal entities in Europe and the U.S., each with its own set of shareholders.)
The decision was tough, "however, following Russia’s invasion of Ukraine, EXMO.com as a global group wishes to avoid risking our global expansion plans by operating in such high risk markets," the blog post reads.
EXMO's expansion plans include securing a distributed ledger technology provider license in Gibraltar, as well as Financial Conduct Authority (FCA) authorization in the U.K. and money service business (MSB) licenses in 40 states in the U.S., Zhdanov told CoinDesk.
"By the international standards of assessing risks, Ukraine is less risky for us than Russia," Stankevich said.
EXMO isn't the first crypto exchange to distance itself from Russia since the war began. Since February, several cryptocurrency platforms have followed the lead of mainstream companies such as Visa, Mastercard, Western Union and others. They include crypto exchanges Binance, which stopped accepting payments via Russian bank cards; CEX.io, which suspended deposits and withdrawals for Russian and Belarusian users; and CoinZoom, which paused registration of new accounts from Russia.
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