coindesk.com
EXMO, a London-based cryptocurrency exchange that used to be one of the fiat on-ramps for users in Russia and Eastern Europe, is cutting ties with Russia to avoid the damaging association after the country invaded Ukraine, the company said in a blog post today.
"After careful consideration and evaluation of the company structure, we arrived at a conclusion that serving Russian and Belarusian clients will prevent us from maximizing our strengths and performing better. In this current climate, which is highly uncertain, we must prioritize our adaptability by following a more rigid strategy," the blog post reads.
The announcement goes on to say that EXMO "decided to sell the digital assets business in Russia and Belarus." EXMO is also giving up its users in Kazakhstan since the new owner is based there. The structure of the deal is unclear, as EXMO hadn't been operating as a separate legal entity in Russia. According to Maria Stankevich, EXMO's chief business development officer, what's being sold is "around a million users, software, intellectual property and [much] more."
A Kazakhstan-based EXMO RBK LTD. will pick up serving the users in Russia, Belarus and Kazakhstan, according to the announcement, on a separate website, EXMO.me. At this point, the interface of EXMO.me fully replicates that of EXMO.com.
The beneficiary buyer, whose name EXMO did not disclose, is "a Russian based software development company, which was one of the vendors to provide engineering services to EXMO during the last three years," according to the blog post.
EXMO will stop onboarding new users in Russia, Belarus and Kazakhstan. Russian ruble trading pairs were disabled on EXMO.com on Apr., 15, the company said.
In addition, one of EXMO's founders with Russian citizenship, Eduard Bark, is leaving the company and transferring his stake to current EXMO.com CEO Serhii Zhdanov. Bark used to own 37.51% of the company, so now Zhdanov owns a share "slightly" bigger than other shareholders (EXMO Group operates several legal entities in Europe and the U.S., each with its own set of shareholders).
Difficult decision
The decision was tough, "however, following Russia’s invasion of Ukraine, EXMO.com as a global group wishes to avoid risking our global expansion plans by operating in such high risk markets," the blog post reads.
EXMO'sexpansion plans include securing a distributed ledger technology provider license in Gibraltar, as well as Financial Conduct Authority (FCA) authorization in the U.K. and money service business (MSB) licenses in 40 states of the U.S., Zhdanov told CoinDesk.
"By the international standards of assessing risks, Ukraine is less risky for us than Russia," Stankevich said.
EXMO is not the first crypto exchange to distance itself from Russia since its invasion of Ukraine. Since February, several cryptocurrency platforms have followed the lead of mainstream companies such as Visa, Mastercard, Western Union and others. They include Binance, which stopped accepting payments via Russian bank cards; CEX.io, which suspended deposits and withdrawals for Russian and Belarusian users; and CoinZoom, which paused registration of new accounts from Russia.
Read more: EU Bans Providing High-Value Crypto Services to Russia
