Russian politicians have pressed for a change of tack by the
central bank, which has proposed restricting cryptocurrency trading and mining
because of concerns it may cause financial instability. They say it should
instead regulate a business which could draw in more tax revenues.
President Vladimir Putin has called for the central bank to
find a consensus on how to deal with the cryptocurrency business, which central
banks and regulators around the globe have been grappling with.
"Our goal is to obtain a licence and conduct legal
business where the regulation allows," Binance Eastern European Director
Gleb Kostarev told Reuters, adding that his company hoped for a progressive
regulatory approach from Russia that could influence the approach taken by its
neighbours.
Kostarev said Russia, where the central bank says the annual
volume of cryptocurrency transactions stands at about $5 billion, was
strategically important for Binance.
He described the central bank's proposals to restrict
trading as harsh, adding: "For now, we consider this as an invitation to
dialogue with the regulator."
Russia for years opposed cryptocurrencies, saying they could
be used in money laundering or to finance terrorism. It gave them legal status
in 2020 but banned their use for payments.
Kostarev said Russia's approach now could help determine how
other nations in the region dealt with cryptocurrencies.
"In Ukraine, Kazakhstan and Uzbekistan they are more
loyal to cryptocurrencies and are taking steps towards liberalisation, rather
than restriction," he said. "But local regulators are taking these
steps with an eye on Russia."
The global hashrate, which refers to the computing power
used by computers connected to the bitcoin network, was reduced by about 20%
this month because of political unrest and power blackouts in Kazakhstan,
Binance estimated.
Kostarev said the rate was now recovering.
A Reuters investigation last week showed Binance withheld information about its finances and corporate structure
from regulators, even as it welcomed government oversight and lauded its
anti-money laundering programme.
A Binance spokesperson responded saying the company backed
"technologies and legislation that will set the crypto industry on the
road to becoming a well-regulated, secure industry."
The investigation also found Binance acted against its own
compliance department by recruiting customers in Russia and six other states
deemed to be of "extreme" money-laundering risk.
Binance said it had "one of the most sophisticated approaches"
to enforcing anti-money laundering and counter-terrorism financing in the
finance sector and internal risk ratings were adjusted according to a range of
variables.