Ukraine Crypto Fundraiser Wants EU to Investigate Whether Binance Is Helping Russia

When asked for proof, Michael Chobanian argued it is "obvious we don’t have proof since it is a closed box.”

AccessTimeIconMar 24, 2022 at 12:50 p.m. UTC
Updated Mar 24, 2022 at 3:43 p.m. UTC

Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

The European Union should “investigate” whether the Binance crypto exchange is "cooperating" with the Russian government circumvent sanctions imposed after Russia's invasion of Ukraine, said Michael Chobanian, founder of Ukraine's Kuna exchange.

“I’m not the court, but [the EU] should investigate," said Chobanian, also president of the Blockchain Association of Ukraine and the person managing donations for the Crypto Fund of Ukraine. "If [Binance is] innocent, I will say [I'm] sorry. If Binance is [not], then they [the EU] will have to deal with it,” Chobanian said in an interview with CoinDesk.

CoinDesk had asked Chobanian whether Ukraine had found proof to support his recent allegation on CoinDesk TV that “Binance is cooperating with Russia” in the context of avoiding sanctions.

At the time, Binance, the biggest crypto exchange by volume, had said, "We prefer not to comment on false accusations.” In February Binance said it had no plans to unilaterally ban Russian users from the platform but that it would take actions against those who have had sanctions levied against them.

Chobanian argued it is "obvious we don’t have proof since it is a closed box.”

“Think of Binance as a big bank that can sell you bitcoin (BTC) but instead of buying bitcoin or any other crypto you can top up an account in rubles and then you can change those rubles into U.S. dollars and withdraw in another country without even buying crypto. So it is fiat transaction in, fiat transaction out. It is about guarding the fiat gateways,” Chobanian said.

EU parliamentarian Stefan Berger, the lawmaker responsible for handling the procedure and content of the MiCA (Markets in Crypto Assets) legislative package, told CoinDesk in an earlier interview that “of course, we have clues that some Russians used crypto assets or platforms to circumvent the sanctions.”

Berger made it clear that private persons, not companies, were conducting such actions.

“This is what the [European] commission told us and most of the transactions were made in the last weeks. I have no clue whether it goes any further,” Berger said. He reiterated that this is “why MiCA is so important. It’s a signal that we want to build supervision architecture to start monitoring what happens in Russia.”

Berger was responding to allegations by Christine Lagarde, president of the European Central Bank, that crypto service providers may be an “accomplice to” circumventing sanctions against Russia.

Speaking at the Bank for International Settlements’ Innovation Summit on Tuesday, Lagarde said the amount of Russian rubles going into crypto and stablecoins has been on the rise. She reiterated how “critically important” it is to quickly finalize and enforce MiCA.

In his interview with CoinDesk, Chobanian reiterated Ukraine President Volodymyr Zelenskyy's request to close the airspace over Ukraine as being more effective right now than sanctions.

“My opinion is that the European Union should close the sky or give us more weapons or accept [Ukraine] as a member of NATO. That would be more helpful rather than doing sanctions. Sanctions are something you do when you can’t do something else,” Chobanian said.

Chobanian told CoinDesk that $64.5 million was the latest figure of donations the crypto fund of Ukraine has received.

But as he did on CoinDesk TV, he questioned whether Binance’s promised donation had actually been made.

Binance has promised $10 million to charity and on-ground relief organizations for Ukraine, but Chobanian says that only around $2.5 million has been sent.

“When we started investigating we found it is only $2.5 million. They make $10 million in Russia on a daily basis or hourly, so it is peanuts,” Chobanian said.

He also hinted there could be a Ukraine government non-fungible token coming soon. “There will be a few announcements very soon but I don’t want to spoil the launch. There will be a few things the government is doing and a hint is it will be regarding NFT,” he said.

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Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

CoinDesk - Unknown

Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

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