Most Crypto Sent From Wallets Sponsoring Russia in Ukraine War Reaches CEXs, Binance, Research Shows

March 30, 2023 Bitcoin.com

We Must Expedite the Move From Centralized Services to Viable DeFi Alternatives

January 23, 2023 Bitcoin.com

CEXs refuse blanket asset freeze of all Russian users, though questions linger

March 4, 2022 Coin Telegraph

CEXs

If Western sanctions ramp up, CEXs may be forced to ban all Russian users from using their services, as they have previous done in Iran.

Centralized exchanges (CEX) and CEOs from companies such as Binance, Coinbase and Kraken have all stated they would only freeze the assets of Russian clients specifically targeted by Western sanctions — not that of everyday Russian users.

A few days prior, Mykhailo Fedorov, Ukraine’s minister of digital transformation, had called for “all major crypto exchanges to block [wallet] addresses of Russians” and “also to sabotage ordinary users [by freezing their assets].” In explaining why he was not preemptively banning all Russians (though, Coinbase is not available in Russia), Brian Armstrong, CEO of Coinbase, specifically wrote:

“We believe everyone deserves access to basic financial services unless the law says otherwise. Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too.”

However, Armstrong also said that “if the U.S. government decides to impose a ban, we will of course follow those laws.” The sentiments of this statement were echoed by Kraken CEO Jesse Powell, who stated:

“Kraken cannot freeze the accounts of our Russian clients without a legal requirement to do so. Russians should be aware that such a requirement could be imminent.”

Unsanctioned individuals appear to be feeling the effects of sanctions even so. The day prior, Binance announced that cardholders of sanctioned Russian banks would not be able to use them on its platform. On Friday, Redditor u/Sammy12xyz raised the issue Iranian crypto enthusiasts face amid calls for CEXs to crackd own on Russian customers, claiming:

“It’s already happened to Iranian accounts. We’ve been blocked out of Binance for two years, and no one’s said shit. Are we not innocent?”

Despite such sanctions, it appears there are several, albeit limited, ways to circumvent them. As one KuCoin moderator wrote:

“Users from Iran can use our exchange, but KYC [Know Your Customer] is not supported. If you wish to proceed without doing KYC, you may still perform all functions on our exchange as normal, even if you are not verified. However, there will be a withdrawal limit of 5 BTC per 24 hours for unverified accounts.”

In addition, CEX bans on Iranian IP addresses can be allegedly bypassed with VPNs. Although one Iranian crypto enthusiast Cointelegraph spoke to claimed that cryptocurrencies such as Bitcoin (BTC) are needed in the first place to purchase VPNs in Iran, as such services do not accept fiat payments from Iranians due to sanctions.

DEXs growing faster than CEXs but Binance still sees 171M visitors in a month

November 11, 2021 Coin Telegraph

Binance

According to Chainalysis data the number of DEX’s doubled between Q1 2019 and Q3 2021, while the amount of CEX’s stayed around the same.

A new Chainalysis report shows that the number of decentralized exchanges (DEXs) is growing faster than all other types of crypto exchanges. But Similar Web data shows centralized exchanges are far from unpopular, with Binance seeing 171 million visitors in October.

Chainalysis published a report on crypto exchanges on Nov. 11 and provided an analysis by breaking the exchanges down by their business models including DEXs, CEXs, over-the-counter (OTC) brokers, derivatives platforms and high-risk exchanges with minimal know your customer (KYC) requirements.

According to the data, the number of DEX’s between Q1 2019 and Q3 2021 increased more than 100% to sit at around 205 as of June this year. In comparison, the number of CEX’s temporarily increased from around 100 to 120, before dipping back to the 100 region within that time frame.

The amount of OTC brokers also increased significantly, gaining around 50% to sit at the 150 mark in Q3 2021. The number of derivatives exchanges got a slight bump to around 125 in 2019, and has essentially held at the region since, while high-risk exchanges broke out during the middle of 2020 to around the 150 mark, before sharply dropping below 100 in Q3 2021.

*Growth of active crypto exchanges: Chainalysis*

“Of course, the number of active exchanges in each category isn’t the only way to judge the health of those categories. After all, cryptocurrency businesses aren’t simply trying to survive — they need to grow their userbases and transaction volumes in order to thrive,” the report said.

Across all categories however, the number of small exchanges has dropped, suggesting the exchange market can no longer support niche players. The lesson? Exchanges need to reach a mass audience, or a small audience of large-scale traders, in order to stay in business.
— Chainalysis (@chainalysis) November 10, 2021

Chainalysis emphasized that the growing popularity of DEXs over the past two years has coincided with the “explosive growth of the DeFi category in general.” The firm highlighted that the total value received by DEX’s grew from around $10 billion in July 2020 to a peak of $368 million in May 2021, marking an increase of roughly 3579%.

Binance is still the top dog

Despite facing intense scrutiny and pushback from regulators across the globe in recent months, data shows that the centralized exchange Binance still towers over its competitors.

According to data from Similar Web compiled by Finbold, Binance had the most web traffic out of all crypto exchanges in October with a total of 171 million visitors. The figure represents a 12% increase compared to the month before. Coinbase ranks second with 91 million visitors last month, and had a 31% surge in traffic compared to the month before.

Notably the third most popular exchange is PancakeSwap, a DEX that operates on the Binance Smart Chain, with 25 million visitors and a 14% month-over-month increase. While Bybit sits at fourth with 24 million (down 8% from September).

Coingecko data shows that Binance is well ahead of its competitors in terms of volume, with the platform seeing more than $33.3 billion over the past 24 hours. That figure is more than five times larger than the total of second-ranked Coinbase, which generated $6.6 billion worth of 24-volume.

On Thursday the Wall Street Journal reported that former Binance executives estimated that the firm could be worth up to $300 billion as a publicly-traded company. It is unclear when or how Binance will go public, considering its lack of a formal headquarters. However, CEO Changpeng Zhao said in September the Binance’s U.S. branch was looking at an initial public offering (IPO) in 2024.

CEXs

Binance is still the top dog

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