Binance, one of the world’s largest Bitcoin (BTC) exchanges, is being targeted for allegedly not respecting the privacy of its users. A Reuters investigation revealed that this company gave data from its clients to the Russian government, more precisely to the politician Alexey Navalny, a staunch opponent of President Vladimir Putin. The exchange responded on April 23 by denying the accusation.
The Reuters investigationpublished on the eve of this Saturday, April 23, indicates that the pressure from the Russian government to obtain sensitive data from Binance users, under the excuse of “fighting crime”, They left the directors of the exchange house without “many options”, who finally had to give in to the Stateaccording to that medium.
The pressure came from an agency in charge of combating money laundering and other crimes, called Rosfinmonitoring or Rosfin, a subsidiary of the FSB, Russian intelligence, the eldest of the now defunct KGB.
According to a Reuters account, this agency intended to trace the million dollars in bitcoins which were raised by Navalny, through his Foundation. This network was described as a “terrorist organization” by the Kremlin. According to the opponent – now in prison – these funds would be used to finance efforts and expose the alleged corruption of President Putin.
And it is that, since Navalny was arrested in January 2021 (after recovering from a poisoning that almost cost him his life) the Foundation has urged all people to donate cryptocurrencies through Binance. They presented it as the “safest way” to do it, since the donor data could not be known.
However, Reuters says that amid pressure Binance’s head for Eastern Europe and Russia, Gleb Kostarev, had to accede to Rosfin’s request, sharing sensitive data from his clients. About this, the agency assures that it had access to data that confirms it. “I didn’t have many options,” Kostarev reportedly said.
Although Kostarev did not comment for the Reuters report (according to what that medium limited), Binance itself stated that it had never been contacted by the Russian authorities regarding Navalny. and that they rather “actively” sought to comply with Russian regulations, for which they responded to “appropriate requests from regulators and law enforcement agencies.”
Says Reuters that the connection between Binance and the Russian government was outlined as efforts by the bitcoin-linked firm “to build ties with Russian government agencies as it sought to boost its growing business in the country.”
Binance dissociates itself from the remarks
Shortly after the Reuters investigation was published, Binance came forward to disassociate itself and refute such allegations. As they said, at no time did they give information about their clients to the Russian government.
In a release which was published on the company’s official blog, described the Reuters article as a “false narrative”. They defended that this company, a pioneer of traditional journalism, “has tried to portray, falsely, that Binance has close ties with agencies controlled by the FSB and Russian regulators.”
Such that “suggestions that Binance shared user data, including Alexei Navalny, with Russian agencies controlled by the FSB and Russian regulators are categorically false,” according to the crypto firm.
Binance’s own head for Eastern Europe and Russia, Gleb Kostarev, came out to defend himself. On his Facebook account, public: “It is an absolute lie that I or Binance leak Navalny or user data to Rosfin or the FSB.”
The company led by Chanpeng Zhao points out that, like any other of its kind with operations in Russia, they were pushing for the development of a regulatory framework for the ecosystem. These talks ceased when the invasion of Ukraine broke out..
Instead, we aggressively implement sanctions against Russia. “Today, Binance is the only cryptocurrency exchange in the world to implement the latest package of measures against Russian account holders,” they explain.
In fact, on April 22 we published in CriptoNoticias that Binance had restricted Russian users, yielding to European regulators and complying with the sanctions that the European Union has imposed on the Russian government for the events in Ukraine.
Remembering its centralized essence
Returning to the topic of sharing clients’ personal data, Binance recalled its essence as a centralized exchange, noting that any government or agency can easily request sensitive informationbut provided it is done at the request of a legal authority.
“Russia is no different,” they excuse. Complying with disclosure obligations to authorities in each jurisdiction is a big part of becoming a regulated business.
In any case, they reiterate, “Binance has not entered into any type of agreement with the Russian government”, since what was requested, they say, they are “ordinary obligations” that concern any traditional bankfor example.
As it is, Binance says that they will be formally complaining to Reuters for publishing an article that “completely contradicts the reputation of this outlet” as it “does not represent our experience working with many other journalists in their organization.”