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 offer to buy or sell cryptocurrency. It also functions as a crypto escrow service. However, unlike Binance’s main 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 such as Tinkoff and Rosbank as transfer methods. This led to criticism that Binance may 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 removed 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 circumvent sanctions. “We regularly update our systems to ensure compliance with local and global regulatory standards,” the spokesperson reportedly said. “When gaps are pointed out to us, we seek to address and remediate them as soon as possible.”
On the same 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 no longer on the list, nor are their code word equivalents.
Related: Russia to begin CBDC trials with 13 banks.
Despite their official removal, Cointelegraph found that Binance P2P users are still advertising sales with “the green bank” as their payment method. These users list other methods of payment, such as Russian Standard Bank or Ak Bars Bank, in the “payment method” field but then state explicitly within the “advertiser’s terms” that they will only accept transfers using “the green bank.”
In this way, users have been able to continue 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 necessary to prevent government payment censorship, while detractors say they are used by criminals to move illicit funds.
Before 2023, one of the most popular peer-to-peer marketplaces was LocalBitcoins. However, it was shut down earlier this year, and some 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 new marketplace called “Civ Kit” that he claims will be much more difficult for governments to shut down.