Exmo Says It Sold Russian Crypto Business; New Owner Will Continue To Use Company Name

The London-based cryptocurrency platform Exmo said it is terminating services to Russians and Belarusians, citing the Russian invasion of Ukraine turning them into "high-risk markets." But that is not the whole story.

Exmo sold its userbase to an unnamed Russian-owned company that will continue to provide services to the same markets under the same Exmo brand name, albeit its website will have a different domain extension. The new owner runs a Russian company that used to provide Exmo with engineering services.

The cryptocurrency exchange platform, which used to be one of the fiat on-ramps for users in Eastern Europe and Russia, announced the termination of its services to Russians, Belarussians and Kazakhs in a blog post. The platform terminated onboarding new users in Russia and Belarus and disabled Russian ruble trading pairs from Friday.

"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 company said.

The invasion and the consequent sanctions imposed on Russia by the U.S. and EU have made it difficult for companies to continue to operate in the market. Doing so exposes them to criticism about making profits while ignoring the bloody toll on Ukrainian civilians. Several companies operating in Russia have already pulled out, or are in the process of doing so.

Exmo was founded by Russian entrepreneurs and blockchain enthusiasts Ivan Petuhovski and Pavel Lerner in 2013. As part of the sale, Exmo's Ultimate Beneficial Owner (UBO), Eduard Bark, leaves the company and transfers his stake to CEO Sergey Zhdanov.

Exmo did not disclose the details of the deal, but according to its chief business development officer Maria Stankevich, it involved selling "around a million users, software, intellectual property and [much] more."

The company did not reveal the name of the new owner of the platform that will continue to provide services to Russians, Belarussians and Kazakhs. Kazakhs were included in the new agreement since the new team is based in Kazakhstan.

It said the new owner of the digital cryptocurrency platform also owns a "Russian-based software development company, which was one of the vendors to provide engineering services to Exmo during the last three years."

It looks like Exmo simply made a different, independent platform to avoid criticism and sanctions for dealing with Russia. Services in Russia, Belarus and Kazakhstan that Exmo provided will now be handled by Kazakstan-based Exmo RBK Ltd and will use a different website, Exmo.me, but feature the same interface found on Exmo.com. "As a company, we are very confident and positive about the future of our business and consider the new structure of the business commercially viable and sustainable," Exmo said in the blog post.

Exmo said in the blog post that it "decided to sell the digital assets business in Russia and Belarus" in order to provide clients and stakeholders "with the highest level of security and safety in the future." The company said it wants to avoid the Russian market in the interest of its "global expansion plans."