Yesterday, the European Union have imposed a series of sanctions against Russia. Along with other sanctions, restrictions on cryptocurrency transactions for Russians have been introduced. The ban affected all wallets, accounts or services for storing cryptoassets, regardless of the amount of the wallet (previously allowed up to €10,000). Binance and other centralized cryptocurrency exchanges subject to EU regulation will be forced to restrict transactions for their Russian users sooner rather than later.

There have been no official announcements from Binance yet. But back in April this year, Binance already introduced certain restrictions under the sanctions pressure. Since then, Russians can make transactions on this exchange in the amount of no more than 10,000 euros.

Why does it matter? Crypto universe has been proud to outline its adherence to independence and decentralization for several years. It was sensational and very uplifting for most. Its leaders and loudmouths kept saying that it is the decentralization that gives all people equal opportunities regardless of their race, religion or whereabouts. What we see now is that its majors are apparently surrendering under circumstances downsizing themselves to some kind of minor unofficial payment systems, apparently way less convenient and comprehensible than the most well-known of them like PayPal (PYPL) and even Square (SQ). So the main question isn’t whether or not Russians will be further restricted in their freedoms to use cryptos. Stakes are much, much higher: what’s going on is nothing less than a wager of survival of the entire crypto and blockchain universe in its original meaning and designation. So it’s up to people in the broad sense of this word to decided if they really need it. We’ll definitely see it soon.

With the introduction of new sanctions, the limit of permitted transactions will decrease to zero. Russian users of the exchange will only be able to withdraw their funds. As in the spring, the exchange will most likely warn about this in advance and give time to close accounts. Does it make sense for users to keep their loyalty to this, or any other crypto exchanges, complying with conventional injunctions of the US or European courts? Already now, many users opt to exit for other trading platforms or even ordinary crypto wallets – either decentralized exchanges or centralized ones that do not outline their compliance with jurisdiction of the United States or European countries. When choosing a centralized cryptocurrency exchange, one should look at where it is domiciled and whether it is liable to comply with sanctions, because by default it doesn’t have to.

Working with ‘pseudo-centralized’ exchanges has always carried the risks of a centralized fiat system. Funds on such a trading platform could always be frozen or confiscated. Now, at least for Russians, the period of mass use of large centralized crypto exchanges is likely coming to an end.

This whole story will negatively affect the financial performance of Binance. Smaller exchanges that follow the path of complying with sanctions risk even facing bankruptcies.