Binance’s Changpeng Zhao denies owning CommEX after selling the Russian entity.

Binance's Changpeng Zhao denies owning CommEX after selling the Russian entity.

Binance’s Ownership of CommEX: Setting the Record Straight

Source: screenshot of YouTube video on Binance’s channel

Binance, one of the leading cryptocurrency exchanges in the world, recently launched a new digital asset exchange called CommEX. However, rumors started circulating regarding the ownership of CommEX, leading to Binance CEO Changpeng Zhao (CZ) clarifying the situation. In a post on X (formerly Twitter), CZ unequivocally denied any form of ownership, both personally and through proxies, emphasizing that former Binance staff in the region may choose to join the CommEX team. Let’s delve deeper into this development and understand the implications it carries for the blockchain industry.

The Low-key Agreement and Misconceptions

The low-key nature of the agreement and the fact that CommEX was just a few days old fueled speculations about CZ’s ownership of the new exchange. To put these rumors to rest, CZ reassured the community that he is not the Ultimate Beneficial Owner (UBO) of CommEX and does not hold any shares in the company. He drew a stark comparison to other business deals where companies like Mercedes, McDonald’s, and Nissan had buyback options in their sell-off deals in Russia, pointing out that there are no such provisions in Binance’s deal with CommEX.

Asset Transfers and User Experience

Beyond addressing ownership, CZ shed light on other aspects of the transition from Binance to CommEX. As the transition takes effect, there will be transfers of assets between the two companies. This means that users will be migrated to CommEX, and older transactions will be included in the process. CZ explained that Binance specifically requested similarities in design and application programming interfaces (APIs) to ensure a seamless user experience during the migration.

Moreover, CZ clarified that CommEX does not offer services to users in the United States and European Union. This restriction is in line with the deal Binance negotiated with CommEX, primarily to address compliance and regulatory concerns. IP and KYC blocks were implemented as part of the agreement to ensure compliance with regional regulations.

Binance’s Farewell to Russia

Binance’s decision to exit the Russian market came after a month-long period of uncertainty resulting from investigations into allegations of breaching sanctions imposed on Russian institutions. While financial details of the sale remain undisclosed, Binance confirmed that it sold its entire Russian arm to CommEX. Importantly, Binance assured users that all assets held by Russian users are safe and secure.

Noah Perlman, Binance Compliance Chief, explained that the Russian market is incompatible with the exchange’s compliance strategy. As a result, Binance will now shift its focus to the 100+ other countries in which it operates. This strategic decision aligns with the exchange’s confidence in the long-term growth of the Web3 industry worldwide.

Conclusion

The situation surrounding Binance’s ownership of CommEX has been clarified by CEO Changpeng Zhao. He unequivocally denied any ownership personally or through proxies. In addition to dispelling ownership myths, CZ shed light on the asset transfer process, user experience during the transition, and the reasons behind Binance’s decision to exit the Russian market.

This development highlights the complexities and challenges that exist within the blockchain industry. Regulatory compliance, regional dynamics, and maintaining a seamless user experience are crucial factors that exchanges like Binance need to navigate. As the industry continues to grow, it is essential for stakeholders to stay informed and adapt to these evolving circumstances.

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