Ukrainian bitcoin community names alternative to Binance for Diia payments

Due to Binance’s ambiguous stance on serving users from sanctioned countries, Ukraine should abandon cooperation with the bitcoin exchange and use local services. This was stated by ForkLog UA, according to interviewed participants in the country’s cryptocurrency market.

At the beginning of November Binance announced plans integration of Bitcoin payments into the government Diia app via the Binance Pay service. At the same time, the exchange continued to serve Russian and Iranian users under sanctions by Europe and the United States.

Representatives of the Ukrainian crypto community believe that Binance must “choose a side”.

“Binance has decided to continue operating in both Russia and Ukraine. At the same time, investigations into the platform’s dealings with Iran and money laundering have been published. Binance is currently the main financial intermediary for shadow schemes involving Russian money”, — says Mikhail Chobanian, founder of Kuna.

The head of BlockSoftLab, Vadim Grusha, created a petition to block plans to integrate Diia with Binance’s decisions.

“In case Binance does not comply with international sanctions and does not stop operating on the territory of the aggressor state, — block the exchange’s operations on the territory of Ukraine”, — the petition text states (ForkLog UA has it).

The document also notes that Binance offers 18 trading pairs with the Russian ruble, and that “the platform serves Russians daily with hundreds of millions of dollars — tens of billions since the invasion began.” In addition, the document notes that Binance is a member of the Association of Russian Banks and “works with Iran, unfriendly to Ukraine.”

Kuna has already остановила deposits and trading operations with BNB tokens, leaving only the ability to withdraw assets.

Neo-bank Trustee Plus запретил своим клиентам пополнение и покупку BNB.

The WhiteBIT exchange also закрыла deposits and trading in BNB pairs. Clients could withdraw funds in these assets until November 17.

Allbridge co-founder Andrey Velikiy told ForkLog UA that Binance should drop support for the ruble and take a “more aggressive stance” on sanctions:

“I agree that accepting and withdrawing deposits in rubles amid Russia’s invasion of Ukraine is bad. Does that mean we should not work with Binance at all, in particular giving people in Ukraine access to crypto with a subsequent withdrawal of funds — I don’t know.”

Velikiy also called the argument that Ukraine should not work with the exchange due to potential transactions with Iran “strange” — “there are few confirmed facts to this.”

“If the Ministry of Digital Transformation, for some reason, decides to integrate Binance technology so people have the ability to buy and sell crypto, they are probably guided by some internal guidelines, as well as Binance’s stated position on Russia’s invasion of Ukraine and what it does to counter the consequences of this from its side,” — he said.

Overall, representatives of the Ukrainian crypto community advocate integrating cryptocurrencies into government services. However, they propose giving preference to local companies in this matter. 

“This is not only patriotic and right from a security perspective, but also provides a ton of additional possibilities. Believe me, our domestically developed WhitePay is no worse than Binance’s solution.”

Weld Money co-founder Irina Lorens also noted that there are similar Ukrainian solutions that could be integrated into state services:

“Given the current situation, it would look highly odd if Ukraine’s Diia were integrated with an exchange that is still operating in Russia, has a huge number of trading pairs with the ruble, and has not blocked users from there.”

Meanwhile, Binance is already partially integrated into Diia — in September the exchange added the ability to verify through the app. 

Binance’s Position

In April, due to EU sanctions, the exchange imposed restrictions on Russian residents, whose assets on the balance sheet exceeded €10 000. 

In October, the European Parliament fully prohibited servicing Russian crypto wallets in the eurozone. CEO Changpeng Zhao then stated that licensed Binance entities in Europe would certainly not work with Russian residents, but there was no clear decision yet for other jurisdictions.

In a ForkLog UA interview, Binance representatives stressed that the company’s EU units do not provide cryptocurrency services to individuals and legal entities under sanctions. They also recalled the exchange’s cooperation with Ukrainian law enforcement to track and block illicit activity against Ukraine.

“Binance tightens control over IP address blocking and geolocation to cover all territories not under the Ukrainian government’s control in Donetsk, Luhansk, Zaporizhzhia and Kherson regions and the Crimean Peninsula. It is important to note that Binance has no offices or legal entities in Russia”, — said the trading platform’s representatives.

Regarding handling transactions related to Iran, Binance asserts that citizens of the country and local entities are prohibited from opening accounts or conducting trading activity:

“Although Binance.com is not an American company, we actively block users from sanctioned regions, requiring all our customers to complete full KYC.”

The exchange also cited Elliptic’s statement on the difficulty of tracking sanctioned wallets due to the lack of a comprehensive list.

“While data analysis methods can identify wallets run by sanctioned entities, they often use new addresses with no transaction history. Only after these addresses begin to transact can data analysis link them to sanctioned wallets,” the analysts noted.

Pause in Cooperation

Against the backdrop of criticism from the Ukrainian crypto community, the Ministry of Digital Transformation announced the suspension of the project to implement Binance Pay in Diia. 

According to Deputy Minister for IT development Alexander Bornyakov, interactions with state services will involve only licensed providers in Ukraine that meet specific criteria and requirements.

“These requirements are still under development, and the situation is complicated by the lack of a legal framework for virtual assets in Ukraine, which would greatly facilitate interaction between market participants and government services. After development, these criteria will be published, and all interested parties will be able to submit proposals for potential integrations,” the official said. 

Binance also confirmed that cooperation on this issue has been postponed until the adoption of additional regulatory acts. 

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