Opinion: Court ruling blocking Binance is legally unfounded

The prosecutor’s office did not provide a clear explanation of why the information posted on the Binance cryptocurrency exchange’s site should be deemed prohibited, and acted unilaterally, which contradicts procedural norms. GMT Legal managing partner Andrey Tugarin told ForkLog in an interview.

The court ruling to block the Binance cryptocurrency exchange was issued in June 2020. The case was heard in the Mirny City Court of Arkhangelsk Oblast on the prosecutor’s suit from the closed city of Mirny dated April 17.

The prosecution argued that the platform “facilitates the circulation of bitcoins by exchanging them for fiat currency”.

“The specified cryptocurrency is not backed by real value and does not contain information about its holders. The process of issuing and circulating bitcoins is fully decentralized and there is no possibility of its regulation, including by the state, which contradicts the current legislation,” the document says.

The court backed the prosecution and found information published on the site binance.com to be prohibited.

Similar blockings have occurred in series since 2013, according to Tugarin.

“The Mirny prosecutor’s office decided that Binance disseminates information prohibited in the Russian Federation. However, it forgot to explain by which regulatory act it is prohibited,” the lawyer notes.

According to him, the recently enacted “On Digital Rights” law does not regulate such cases, as does the law “On Digital Financial Assets,” which has not yet come into force.

“Without notifying the defendant, a unilateral, unfounded decision was issued, based on conjectures and violating a number of procedural norms. We see sufficient grounds for restoring deadlines and appealing,” said the managing partner of GMT Legal.

Earlier, Binance’s director in Russia, Gleb Kostarev, said he intended to challenge Roskomnadzor’s decision in court.

As a reminder, on September 24 Binance received a notification from Roskomnadzor about the platform’s inclusion in the register of banned sites.

The company said it had not previously received any notices from law enforcement or civil and state authorities, nor from the judiciary, about any claims or court decisions.

The exchange continues to provide services to Russian users in full and states that their funds are safe.

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