Beribit in turmoil after Russian officials contemplate crypto exchange ban

Over 50 clients of Russian crypto exchange Beribit attempted to stage a protest at the company’s office in Moscow.

According to reports, the unrest started on April 26 at the Federation Tower, the site of Beribit’s office, with clients clamoring for the return of approximately 400 million rubles, funds they were unable to withdraw for several days. 

The investors have voiced frustration over money being “stuck” during withdrawal processes, contrasting with smooth deposit transactions.

Efforts by Beribit staff to leave through alternative exits were obstructed by the irate investors, prompting police intervention. 

A circulating video on Telegram alleges that instead of cash, disgruntled clients were handed chocolates as a form of redress. 

Mash, a Russian online newspaper, first reported the situation on Telegram.

Gazeta.Ru picked up the story, reporting that exchange employees made promises to refund 50% of investments immediately, with the remaining balance to be reimbursed within one to 15 days. 

On April 26, Beribit’s official Telegram channel announced that following recent management changes at the exchange, a series of balance sheet discrepancies were discovered, forcing the company to institute a thorough audit process. 

According to the exchange, clients were also required to undergo KYC/AML verification processes, which it claims has caused a temporary backlog of requests for deposits and withdrawals. 

Beribit also clarified that clients who successfully pass the KYC/AML audit and verification will get back unrestricted access to use their accounts.

Amidst this tumultuous episode, a bill has reportedly been tabled in the State Duma proposing a ban on crypto exchange operations. The bill, if passed, would not affect crypto transactions or registered mining entities. Additionally, it includes a prohibition on cryptocurrency advertising.

Conversely, another legislator argued that banning exchanges could jeopardize Russia’s national security, highlighting cryptocurrency’s role in procuring weapons and defense assets from non-Western sources and circumventing sanctions.

Beribit, a registered crypto exchange facilitating ruble-crypto, P2P, USDT, and asset trading, recently underwent law enforcement scrutiny with searches conducted at their offices in March.

This scrutiny coincided with a temporary website outage, reportedly linked to investigations surrounding a terrorist incident at Crocus City Hall.