Ukraine Crypto Exchange Founder Accuses Binance of 'Cooperating' With the Russian Government

Michael Chobanian also says Binance has yet to make its promised $10 million donation. The company challenges Chobanian's charge.

AccessTimeIconMar 18, 2022 at 5:38 p.m. UTC
Updated May 11, 2023 at 6:16 p.m. UTC

Ukrainian crypto exchange KUNA founder Michael Chobanian claims the Binance crypto exchange is working with the Russian government despite global sanctions, and has been for some time.

During an interview Friday on CoinDesk TV's "First Mover," Chobanian said CEO Changpeng Zhao must decide on where Binance stands in dealing with Russia after its invasion of Ukraine in late February.

"The problem with Binance is not just that they still continue working on both sides, it's that they showed cooperation with the Russian government before the war, and as far as I know, they still continue cooperating with the Russian government," Chobanian said.

Binance, the biggest crypto exchange worldwide by volume, told CoinDesk in February it had no plans to unilaterally ban Russian users from the platform, but that it would take actions against those who have had sanctions levied against them.

Jessica Jung, a Binance spokesperson, said, "We prefer not to comment on false accusations. Our focus is on helping people." She also quoted from a press release announcing Binance's $10 million donation and the launch of a crowdfunding site called the Ukraine Emergency Relief Fund.

Chobanian offered no proof that Binance is actively working with the Russian government, but the Russian market has long been an important one for Binance.

In 2019, Zhao called Russia "our key market," and that "we are always looking for partners in any community, especially in Russia." In a recent interview with Bloomberg, Zhao said financial sanctions are not a "crypto-specific issue," and that blocking all Russians from the crypto exchange would be "unethical."

On the other hand, Russian authorities have sent mixed signals about crypto, with the central bank advocating a ban but the government proposing to regulate it instead.

Chobanian, who is also the president of the Blockchain Association of Ukraine, appeared before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on Thursday for a hearing on "The Role of Digital Assets in Illicit Finance." During that hearing, he accused Binance of not taking an aggressive enough stance against the Russian government.

"The first thing we did as a crypto community in Ukraine was to shut down all ruble operations because that was a big hole in the sanctions list. … Unfortunately, not all crypto companies followed our lead, mainly Binance," he said during the hearing. He added that crypto may be a useful lifeline for Russians who oppose the war and are trying to leave their country.

"The only way for them to exist outside of Russia right now is crypto, probably. Obviously, not being able to buy a house or a car, but at least you can survive," he said.

Chobanian also said Binance has yet to make the $10 million donation it promised in a statement in February. Binance said then it would send the money to Ukrainian intergovernmental and nongovernmental organizations (NGOs) for humanitarian relief.

"They said that they donated $10 million to the Ukrainian government. Well, I haven't seen that $10 million. No one knows where that went," he said.

In a blog post, Binance cites specific NGOs to which it says it donated. According to transaction details on its website, Binance has so far donated $2.5 million worth of Binance USD (BUSD) and $401,566 worth of Binance coin (BNB).

UPDATE (Mar. 18, 18:19 UTC): Added quote from Binance's spokesperson.

UPDATE (Mar. 18, 21:40 UTC): Added quote from a spokesperson in the last paragraph about Binance's donation.

UPDATE (Mar. 18, 22:00 UTC): Added comment to headline.


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Helene Braun

Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.