As Binance exits Russia, traders look for fresh pastures

• CommEX had high hopes of attracting approximately one million clients after acquiring Binance’s Russian business.
• A growing number of crypto enthusiasts from Russia and Ukraine are turning to Hong Kong platforms.

Binance’s [BNB] exit from the Russian cryptocurrency market has triggered a significant shift among Russian clients, as they sought out alternative platforms for their trading needs.

Notably, CommEX, the company that took over Binance’s Russian operations, is facing challenges in attracting these users.

This transition has also coincided with a notable decline in peer-to-peer (P2P) trading activities. P2P volumes have dropped between 10% and 30%, as reported by Satoshkin CEO Dmitry Stepanin.

Initially, CommEX had high hopes of attracting approximately one million clients after acquiring Binance’s Russian business. However, it appears that many of these clients are opting for other platforms over CommEX.

Dmitry Stepanin, the CEO of Satoshkin, pointed out the decline in P2P activities, with figures falling by a substantial margin. For context, in early 2023, Binance had around 7,700 daily ruble P2P transaction ads.

This number declined to 6,300 by mid-year and further dropped to 3,400 by September. By 3 October, there was no available data on ruble transactions on Binance.

CommEX faces challenges amid shift in trading preferences

This shift in trading preferences is connected to various factors. CommEX’s inability to capture the Binance user base is one of them.

Meanwhile, other exchanges like Huobi, Bitget, Kucoin, and Gate.io, which offer similar features to Binance, have seen increased user activity. This can be attributed thanks to their active marketing campaigns.

Huobi, for example, witnessed its active advertisements increase from 3,900 to 4,500 between the first half of the year and October. ByBit, with 1,800 advertisements in the first half, surpassed 2,700 in October, further illustrating the shift in user preference among Russian traders.

Additionally, a growing number of crypto enthusiasts from Russia and Ukraine are turning to Hong Kong as a refuge for their digital assets.

Merton Lam, the founder of CryptoHK, highlighted that cryptocurrencies have become a significant component of high-net-worth individuals’ investment portfolios in the region.

Pressure from American regulators is the primary reason for Binance’s exit from the Russian market. The exchange faced accusations of money laundering and sanctions evasion.

Moreover, Binance had implemented several restrictions on Russian users. These ranged from limits on wallet holdings and currency purchases on their P2P platform.

Sergei Mendeleev, the CEO of InDeFi Smart Bank, clarified that Binance’s departure should not be seen as an exit from the market entirely. Instead, Binance is rebranding to enhance operational efficiency in Russia.

It’s worth noting that there are no official documents or mentions on the company’s website regarding Russian ownership of the CommEX project.