Crypto exchange Binance has removed “yellow” and “green” payment options from its peer-to-peer service after being criticized for using these code words to represent sanctioned Russian banks, Cointelegraph confirmed on Aug. 25.
Binance’s peer-to-peer exchange service is a message board allowing users to supply to purchase or sell cryptocurrency. It also functions as a crypto escrow service. However, unlike Binance’s fundamental exchange platform, it leaves fiat payments to be handled by users, and no fiat money passes through Binance’s servers.
On Aug. 22, The Wall Street Journal reported that Binance was listing sanctioned Russian banks equivalent to Tinkoff and Rosbank as transfer methods. This led to criticism that Binance could also be violating sanctions by endorsing these banks as payment methods.
On Aug. 24, multiple Russian news outlets began reporting that Binance had eliminated these banks from its list of payment methods. However, these banks had reappeared as code words “yellow” and “green,” with “yellow” representing sanctioned bank Tinkoff and “green” representing sanctioned bank Rosbank.
On Aug. 25, The Wall Street Journal reported that the sanctioned banks were faraway from the list. The report quoted a Binance spokesperson indicating that the banks were removed after the exchange learned that account holders were using the service to bypass sanctions. “We commonly update our systems to make sure compliance with local and global regulatory standards,” the spokesperson reportedly said. “When gaps are identified to us, we seek to deal with and remediate them as soon as possible.”
On the identical day, Cointelegraph confirmed that the “yellow” and “green” payment methods were removed. Sixteen payment methods are still available for Russian ruble conversions to crypto, including Raiffeisenbank, Russian Standard Bank, Payeer, Adv Cash, and others. But Tinkoff and Rosbank are not any longer on the list, nor are their code word equivalents.
Despite their official removal, Cointelegraph found that Binance P2P users are still promoting sales with “the green bank” as their payment method. These users list other methods of payment, equivalent to Russian Standard Bank or Ak Bars Bank, within the “payment method” field but then state explicitly throughout the “advertiser’s terms” that they are going to only accept transfers using “the green bank.”
In this manner, users have been capable of proceed using Binance P2P to sell cryptocurrency through sanctioned payment methods.
Peer-to-peer crypto marketplaces have been controversial since their inception. Supporters argue these marketplaces are obligatory to stop government payment censorship, while detractors say they’re utilized by criminals to maneuver illicit funds.
Before 2023, some of the popular peer-to-peer marketplaces was LocalBitcoins. However, it was shut down earlier this yr, and a few users moved to Binance P2P in response.
Paxful co-founder Ray Youssef argued on Aug. 25 that P2P marketplaces are still too centralized and too vulnerable to shutdown by governments. He is working on a latest marketplace called “Civ Kit” that he claims will likely be way more difficult for governments to shut down.