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Binance refutes allegations it shared user sensitive information with Russian intelligence.

Photo: Rafael Henrique/Zuma Press

Binance, a major cryptocurrency exchange, denied that one of its regional directors agreed to send over client data to Russia's financial intelligence agency in return for payments to anti-corruption and anti-Putin activist Alexei Navalny.

According to Reuters the Binance's head of Eastern Europe and Russia, Gleb Kostarev, met with officials from Rosfinmonitoring, a financial monitoring service linked to Russia's Federal Security Service, or FSB, in April 2021 .
Kostarev reportedly agreed to send over sensitive user data, including names and addresses, to the government, later telling a colleague that he didn't have "much of a choice" in the matter. Another anonymous crypto exchange, on the other hand, is claimed to have refused to transmit client data to Rosfinmonitoring because to concerns about the security of the data.

Users who sent Bitcoin (BTC) to Navalny might have been the focus of the Rosfinmonitoring. Navalny, one of Russia's most renowned opposition figures, raised $6 million in Bitcoin between December 2016 and February 2021. Donations soared when he was poisoned and then imprisoned. Bitcoin and other cryptocurrencies are a key source of funding for Russian pro-democracy campaigners.

Binance, on the other hand, implied in a Friday blog post that the study presented a "false narrative" that provided "just enough balance to attempt to avoid a legal action." The company said it shared user data with "Russian FSB controlled agencies and Russian regulators" was "categorically false" and that it had stopped operations in Russia following the country's invasion of Ukraine on February 24.

"Today, any government or law enforcement agency in the world can request user data from Binance as long as it is accompanied by the proper legal authority. Russia is no different [...] Binance has not entered into any form of unusual agreement with the Russian government that differs from any other jurisdiction.”

Binance made public the email exchanges between Reuters and its spokespersons, which were part of the investigation for the report. The company also said it will make a formal complaint with the news organization, accusing it of "hype" or sensationalist reporting.