Binance has handed over client data to Russian law enforcement: a precedent that changes the rules of the game
The world's largest cryptocurrency exchange has once again found itself at the center of a scandal involving the disclosure of user data. This time, it concerns the transfer of a client's transaction information to the Investigative Committee of Russia. This step became key evidence in a criminal case against IT specialist Yuri Belenky, accused of financing terrorism.
The essence of the case is as follows: according to the investigation, Belenky, between January 2023 and March 2024, transferred funds to support Ukrainian military structures, including the Azov* unit. The total amount of transfers exceeded $700. These funds were directed to crypto wallets advertised in Telegram channels.
How the data became evidence
Russian law enforcement sent an official request to Binance for Belenky's transaction history. The exchange responded by providing not only data on the transfers but also an extensive package of personal information: date of birth, address, phone number, passport details, and even copies of documents. These materials formed the basis of the interim indictment.
Notably, Binance's response also confirmed the identity of the person initiating the transfers, which effectively predetermined the outcome of the pre-trial proceedings. Currently, the 49-year-old Belenky, who holds a Russian passport and Bulgarian residence permit, is in pre-trial detention awaiting trial.
Legal conflicts and reputational risks
The situation raises serious questions about Binance's privacy policy. After leaving Russia in 2023, the exchange was formally not obligated to cooperate with local authorities. However, as lawyers note, there are nuances here. If Belenky had EU resident status at the time of registration (thanks to his Bulgarian residence permit), his data should have been protected by the GDPR regulation. This would mean a ban on transferring information without a court decision and compliance with strict procedures.
Experts emphasize that transferring data to a country not recognized by the EU as a reliable protector of personal information is an extremely delicate step. In the past, Binance has already faced similar accusations when it contested the blocking of its website in Russia.
Belenky himself called the data disclosure "inappropriate" and noted that he had warned other Russians about the risks of such transfers. Exchange representatives, in turn, state that they are merely complying with legitimate requests from authorities and bear no responsibility for their use in court proceedings.
My view on the situation
This case is a troubling signal for the entire crypto community. It demonstrates that even after formally leaving the market, exchanges continue to interact with jurisdictions where legal guarantees for users are minimal. For investors, this means: anonymity and data protection are an illusion if your assets pass through centralized platforms. The question is not whether data will be transferred, but when and to whom exactly. Reasonable diversification and the use of non-custodial solutions are becoming not just a recommendation, but a necessity.
*The organization is recognized as terrorist and banned on the territory of the Russian Federation.