Credits: Reuters

Binance, the world’s largest cryptocurrency exchange, continues to make headlines with its recent decision to remove Banco de Venezuela as a payment method from its peer-to-peer (P2P) trading service.

This move comes shortly after the exchange removed sanctioned Russian banks, signalling a concerted effort to comply with international financial sanctions.

The sudden disappearance of Banco de Venezuela

For Venezuelan users, the disappearance of Banco de Venezuela from P2P payment options was a sudden and unexpected development.

This decision echoes a pattern seen with Russian banks previously. The primary driver behind this action appears to be a Wall Street Journal report on August 24, 2023, which highlighted Binance’s alleged involvement in circumventing international financial sanctions.

Banco de Venezuela, once owned by Grupo Santander, was among the largest financial institutions in Venezuela, commanding over 11% of the local market in the late 2000s.

However, it was sold to the state in 2009 for approximately $1 billion. Sanctions were imposed on Venezuelan government officials and affiliated institutions by the United States Treasury Department in 2018 and 2019, in response to the suppression of the 2014 and 2017 protests.

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Despite the removal of Banco de Venezuela, several private Venezuelan banks, such as Banesco, Banplus, BBVA Provincial, and others, continue to be available on Binance’s P2P platform.

Cryptocurrency Exchanges Respond to Regulatory Scrutiny

The recent scrutiny over the inclusion of sanctioned banks in crypto P2P payment options gained prominence when the Wall Street Journal revealed that Tinkoff Bank and Sberbank were featured as transfer methods on Binance.

These banks disappeared from the platform the same day, although the options coloured “yellow” and “green,” representing their brand colours, remained. On August 25, journalists confirmed that these sanctioned banks had been entirely removed from the list, as confirmed by a Binance spokesperson.

This trend of exclusion extended beyond Binance, as on August 28, two other major crypto exchanges, OKX and ByBit, also decided to exclude sanctioned Russian banks from their payment options.

As cryptocurrency exchanges face increasing scrutiny from regulatory bodies worldwide, they are taking measures to ensure compliance with international sanctions.

These actions not only reflect the changing landscape of cryptocurrency regulation but also highlight the challenges exchanges face in navigating the complex web of global financial sanctions.