Binance Exits Russia: Users In No Hurry To Switch To CommEX
It has been about a week since Binance unexpectedly announced its exit from the Russian market. The company sold the business to CommEX, but users are expressing their concerns and are in no hurry to switch to the new platform.
The Russian market exit
Leaving the Russian market was in many ways an expected move by Binance. The FTX effect spilled over to Binance, and it came under fire by regulators. The exchange was dragged into litigation with the US Securities and Exchange Commission, and media headlines undermined the confidence of the largest exchange's customers in one way or another. As a result, things were coming to a point where the regulator's tight framework prompted Binance to act contrary to its beliefs. The platform ran into problems, began to lose employees and gradually restricted the work of Russian clients, until it decided to leave the local market at all.
And yet, the news of Binance's leaving Russia caused a heated reaction of the crypto industry. But the question was not why Binance left Russia, but how it did it.
CommEX is a secret Russian division of Binance?
Immediately after the announcement of the sale of Binance's Russian division to the yet unknown CommEX, the crypto community wondered what the new player in the industry was all about. A confusion fire erupted, fueled by the scant information about CommEX and the lack of deal details.
CommEX was launched on September 26, a day before the sale of Binance's Russian branch was announced. At that time, it was known only that the new platform was registered in Seychelles in order to serve clients from Russia and CIS countries. CommEX was listed on CoinMarketCap, though that's not a surprise, as the service is owned by Binance.
As rumors and theories spread that CommEX is just a revamped Binance signage, the CEO of Binance tried to dispel some doubts on his X account. He said that CommEX does not serve users from the US and Europe. And in response to questions about why the new platform has a similar API and interface, he stated that it was to ensure a seamless user experience.
But for a smooth user migration from one platform to another, Binance shared with CommEX not only the programming model methodology but also the employees. This is something that Changpeng Zhao mentioned in brief on his X. Moreover, Binance shared its unique commission discount program for those who use BNB to pay for CommEX services.
Some answers about Binance/CommEx.— CZ 🔶 Binance (@cz_binance) September 28, 2023
There will be crypto transfers between Binance & CommEx as users migrate with their funds. There are also older transactions during the testing phase of the integrations. This is expected.
A few ex-Binance CIS team members may join their team,…
But why would Binance be so generous? In a world where competition is a sharp knife in the hands of market participants ready to stab it in the back, generosity is questionable. No wonder the community is suspicious if CommEX is a secret division of Binance. The Russian cryptocurrency market is one of the largest in the world, and Binance couldn't easily walk away.
The obvious consequence of Binance's clumsy move is that Russian clients are in no hurry to switch to CommEX. P2P activity has dropped by 10-20%, according to Dmitry Stepanin, head of Satoshkin. At the beginning of 2023, there were about 7,700 daily ruble transactions on Binance. By September, this figure had fallen to 3,400. Stepanin noted that a growing number of Russian users are switching to well-known and trusted exchanges that offer similar services to Binance. Among these exchanges are ByBit, Huobi, Bitget, Kucoin and Gate.io. For example, by October, the number of marketing messages on Huobi increased from 3,900 to 4,500, and on ByBit increased from 1,800 to 2,700, according to the P2P.Army service.
Meanwhile, CommEx CEO Anton Toroptsev attributes this phenomenon to the fact that users have the freedom of choice to stay on the platform or choose an alternative. Despite bold statements that CommEx expects an influx of one million Russian users, financial analyst Andrei Barkhota estimates that at least 700,000 Russians are registered on Binance.
Users are wary of migrating to CommEx given the fog thickening around the deal to sell the business. Their fears are also supported by the increasing number of fraudulent attacks. Toroptsev notes the rise of several fake exchange accounts in Telegram and fake tokens. Also, several fake CommEx domains have appeared online for phishing purposes. CommEx CEO shared that the platform aims to create a convenient and safe environment for cryptocurrency trading.
The crypto community is left to watch from the sidelines to see if CommEX will become a business in its own right or prove to be Binance's backdoor.