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Russia-linked crypto exchange Exmo will no longer provide services to users from Russia, Belarus and Kazakhstan.

London-based cryptocurrency exchange Exmo is the latest crypto trading platform to formally suspend its business in Russia and Belarus due to Russia’s invasion of Ukraine.

Exmo is selling its digital asset business in Russia and Belarus to a Russia-based software development company, Exmo officially announced on April 18. At the time of writing, the new owner and the size of the deal are not disclosed.

“Unfortunately, we can’t anymore hold the high-risk part of the business, since a global group does not want to put the global expansion plans at any risk by keeping such high-risk markets in its structure,” Exmo CEO Serhii Zhdanov told Cointelegraph.

The deal includes Exmo’s client accounts in Russia and Belarus as well as local fiat onramp systems, Zhdanov said. The technical code of the platform is not sold and is owned entirely by the Exmo group.

As part of the deal, Exmo’s ultimate beneficial owner Eduard Bark is also leaving the company, transferring his stake to Zhdanov.

Apart from Russia and Belarus, the deal also includes Exmo’s business in Kazakhstan because the new owner’s team is based in Kazakhstan. The undisclosed buyer owns both a Russian software development company and a Kazakhstan-based legal entity for a cryptocurrency exchange, the CEO noted.

“We’ve put a lot of effort into the Russian part of the business, so we've made sure that now it's in good hands. The new owner not only follows the roadmap that we've created earlier, but will get to the new heights much easier. We’ve made this decision for the benefit of both sides,” Zhdanov said. The firm said that it won’t sanction regular people or block any accounts due to sanctions in mid-March.

As part of Exmo’s exit from Russia and Belarus, Exmo has amended its user agreement to state that Russian, Belarusian and Kazakh residents are no longer being onboarded on its platform. The exchange disabled Russian ruble trading pairs on April 15.

Exmo is a major crypto exchange founded by Russian entrepreneurs Ivan Petuhovski and Pavel Lerner back in 2013. The firm’s exit from Russia will have a significant impact to the exchange as Russia was one of its main markets, Zhdanov admitted, stating:

“A significant part of our business was located in Russia. We will experience a near 30% revenue decrease. However, in the long run we are sure that it will speed up our exponential growth and let the company become a unicorn in the next three years.”

“We would consider returning when Russia is no longer classified as a high risk country,” Zhdanov stated.

The news comes shortly after Belarus-linked crypto exchange Currency.com announced the termination of operations in Russia last week.

Some major crypto exchanges like Binance are still operating in Russia, choosing to comply with sanctions against certain sanctioned individuals rather than entire nations.

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“In these circumstances we can no longer continue to serve our clients from Russia,” said Vitalii Kedyk, CEO of Currency.com’s Ukraine arm.

Crypto trading company Currency.com has announced it halted operations for clients based in Russia following the country’s “violence and disorder” imposed on the people of Ukraine.

In a Tuesday announcement, Currency.com said Russian residents would no longer be able to access its services following the platform’s decision to stop Russia-based clients from opening new accounts. According to Currency.com’s website, the Gibraltar-based crypto trading platform has offices in Kyiv, London, and Vilnius, but was previously licensed and headquartered in Belarus.

“We condemn the Russian aggression in the strongest possible terms,” said Vitalii Kedyk, head of strategy for the platform’s London operations and CEO of Currency.com’s Ukraine arm. “In these circumstances we can no longer continue to serve our clients from Russia.”

https://t.co/utaDc9wnIa halts operations for residents of the Russian Federation (Russia). Clients from other countries and regions will not be impacted by this decision.

Learn more: https://t.co/PxQRpgjsGa pic.twitter.com/uhsQJvgp6O
— Currency.com (@CurrencyCom) April 12, 2022

Major crypto exchanges have responded to calls on social media to either freeze Russian digital assets or otherwise restrict access for residents amid the country’s military invading Ukraine. A Binance spokesperson told Cointelegraph in February that the exchange would not “unilaterally freeze millions of innocent users’ accounts,” while Kraken CEO Jesse Powell hinted that the only way it would cut off Russian users’ access to crypto would be in response to sanctions.

However, many private businesses including credit card companies Visa and Mastercard have announced following Feb. 24 that they will be scaling down or entirely stopping operations in Russia in response to the war. Ukraine’s government, in contrast, has utilized crypto platforms to solicit donations from around the world, raising more than $60 million as of the time of publication.

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The expansion of sanctions follows the commission announcing in February that it would be removing several Russian banks from the SWIFT cross-border payment network.

The European Commission has clarified that crypto assets will fall under additional sanctions targeted against Russia and Belarus in response to the military conflict in Ukraine.

In a Wednesday statement, the European Commission said member states had agreed to amend regulations with the goal of ensuring “even more effectively that Russian sanctions cannot be circumvented, including through Belarus.” The commission said crypto assets fell under the scope of “transferable securities,” adding that loans and credit provided using crypto would not be permitted as part of these restrictive financial measures.

We are further tightening the net of sanctions responding to Russia’s military aggression against Ukraine

•Listing 160 individuals: oligarchs, Russian Federation Council members
•Belarus banking sector
•Export of maritime navigation technology to Russia
•Adding crypto-assets
— Ursula von der Leyen (@vonderleyen) March 9, 2022

The expansion of sanctions follows the commission announcing in February that it would be removing several Russian banks from the SWIFT cross-border payment network — measures that did not specify how to handle crypto at the time. The European Parliament Committee on Economics and Monetary Affairs is also preparing to hold a vote on a regulatory framework for crypto assets in the EU on March 14.

Both the United States and the European Union have hinted they would be looking at Russia potentially using digital currency to evade sanctions that some have described as “economic warfare.” On Wednesday, U.S. President Joe Biden signed an executive order which will require government agencies to coordinate and consolidate policy on a national framework for crypto as well as explore the potential rollout of a central bank digital currency — the order mentioned the risks of circumventing sanctions three times.

In addition to action from lawmakers, private businesses from fast food chain McDonald’s to major credit card companies including Visa and Mastercard have announced they will be scaling down in Russia and Belarus or entirely stopping operations in the two countries in response to the situation with Ukraine. Crypto exchange Binance also said on Tuesday it would no longer be able to take payments from the two major credit cards issued in Russia due to the companies’ decision.

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"Visa and Mastercard dig their own graves by politicizing their products and pushing people all over the world toward Bitcoin," said Marty Bent.

Cryptocurrency exchanges and financial services companies will soon likely no longer be able to accept transactions completed with many major credit cards following the companies ceasing operations for Russia-based users.

On Saturday, Visa, Mastercard, and PayPal announced they would be suspending operations in Russia following the country’s military actions in Ukraine. Visa called Russia’s actions an “unprovoked invasion” while Mastercard said its decision was aimed at supporting the Ukrainian people. The following day, American Express made a similar announcement, saying it would stop operations in both Russia and neighboring Belarus.

Apple Pay and Google Pay reportedly have restricted services for some Russians, though users also likely wouldn’t be able to use the aforementioned credit cards for transactions on the payment apps.

We are grateful to @Dan_Schulman for #StandingwithUkraine and for suspending business in russia. It makes a huge difference. @PayPal we welcome you in Ukraine! Your presence will provide more financial freedom to 40 million of Ukrainians in these difficult times.
— Mykhailo Fedorov (@FedorovMykhailo) March 8, 2022

The decision from three major U.S. credit card companies and others to stop operating in Russia seemed to have been independent from efforts to comply with economic sanctions, which applied to certain Russian banks and wealthy individuals. Coinbase announced on Sunday that it had blocked more than 25,000 wallet addresses “related to Russian individuals or entities we believe to be engaging in illicit activity,” but at the time of publication has not publicly addressed the credit card ban.

Following the change in the companies’ policies, average Russians using Visa or American Express credit cards abroad or within the country would seemingly no longer be able to use them for everyday transactions. Cards from Mastercard issued by Russian banks will no longer be supported by the company’s network, while those issued by other foreign banks “will not work at Russian merchants or ATMs.”

"We don't take this decision lightly," said Mastercard, which has operated in Russia for more than 25 years.

However, Russia’s central bank issued a statement on Sunday saying both Mastercard and Visa cards would “continue to operate in Russia as usual until their expiration date,” with users able to use ATMs and make payments. It’s unclear how the Central Bank of Russia reached this conclusion given the statements from the credit card companies, but it acknowledged that cross-border payments and using the cards in person abroad would not be possible.

Though the companies did not provide an exact timeline on when operations would cease entirely, at least one cryptocurrency exchange warned users of the change, which is likely to affect many Russian users. On Tuesday, Binance announced starting on Wednesday, the exchange would no longer be able to take payments from Mastercard and Visa cards issued in Russia — the company doesn’t accept American Express.

This is out of our hands. Not our decision. https://t.co/K3mH75Ul3B
— CZ Binance (@cz_binance) March 8, 2022

Presumably, all consumers wishing to buy crypto through an exchange with a credit card issued in Russia from one of these companies will be unable to do so soon, though peer-to-peer transactions would seemingly still be available. There were mixed reactions from social media on the decision, with many claiming the credit card companies could help Ukraine by hurting Russia economically, but at the expense of civilians who had no say in their country’s military actions.

“Preventing Russian citizens who are trying to flee Russia from accessing their money is a crime,” said Marty Bent, co-founder of crypto mining firm Great American Mining. “Visa and Mastercard [are digging] their own graves by politicizing their products and pushing people all over the world toward Bitcoin.”

“For somebody staying in Russia the cards keep working, but you can’t leave because you’ll not be able to pay for anything,” said Twitter user Inna, who claimed to be living in Moscow. “Putin approves.”

As I warned about two weeks ago. #crypto is only the way. #visa Ana #Mastercard just showed the world how unstable, unrelated, centralized and political they are by abandoning Russian people that are so far from the war and Russia as it is possible. This is a modern fascism. https://t.co/wnHEtoKO0J
— Anti Danilevski (@AntiDanilevski) March 6, 2022

While cutting off Visa and Mastercard is a seeminglysignificant blow to Russia and its residents, reports suggest the country may turn to Chinese payment systems like UnionPay — accepted by peer-to-peer cryptocurrency exchange Paxful. Russia’s central bank also has its own Mir cards for payments domestically and in nine countries including Belarus and Vietnam.

Regulators have not issued guidelines to crypto exchanges aimed at cutting Russian users off from trading their coins. Both the United States and the European Union have hinted they would be looking at Russia potentially using transactions in digital currencies to evade sanctions. Leaders at many exchanges, including Kraken, have issued statements saying they will comply with government guidance, but not unilaterally block all Russian users.

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