Binance announced the sale of its Russian entity to a relatively unknown company called CommEX, the transaction of which raised several questions and concerns within the crypto community, primarily due to the limited information available about the company and its ownership. Moreover, CommEX was officially launched on Tuesday.
To address these concerns and provide clarity, Binance CEO Changpeng ‘CZ’ Zhao took to X (formerly Twitter) to provide insights into the deal and its implications.
CZ clarified that he is neither UBO (ultimate beneficial owner) of CommEX nor does he own any shares there despite adding that a few former employees may join the lesser-known crypto platform’s team. His tweet regarding the same read,
“I am not their UBO, nor do I own any shares there. The deal does not have any buy back options. (A google search seems to show some businesses like Mercedes, McDonalds, Nissan have buy back options in their Russia sell off deal. This is not the case here.)”
The exec explained that the older transactions between the two companies were connected to the integration’s “testing phase.” Binance had specifically requested that CommEX adopt a similar design and technical framework to facilitate a seamless transition.
According to CZ, CommEX will not service users from the United States or the European Union. This will be achieved by the introduction of Internet Protocol (IP) and Know Your Customer (KYC) blocks to prevent users from accessing their services in specific geographic locations.
Binance’s sale of its Russian operations to CommEX was due to compliance with Western sanctions. The platform exited from several European countries after failing to secure regulatory footing. Hence, Binance asking CommEX not to service US or EU users as part of the deal isn’t entirely surprising.
The financial details of the deal were not disclosed by either party, but it revealed that the sale would result in a complete exit from the Russian market. The divestment process is expected to span approximately a year.