Cryptocurrency and its anonymity may turn out to be considerably more expensive and of lower quality than crypto enthusiasts around the world are currently being led to believe. Binance, the world’s largest crypto exchange, despite having announced its complete withdrawal from Russia in 2023, handed over a client’s personal data to Russian investigators, which was subsequently used in a criminal case concerning donations in support of Ukraine. This was reported by Reuters on 17 August, citing documents obtained by the human rights organisation ‘First Department’.
The case concerns Russian IT specialist Yuri Belyenko, who was living in Bulgaria and whom the Russian authorities charged with ‘financing terrorism’ after he made donations totalling over 700 US dollars to organisations linked to support for Ukraine, in particular the Azov Regiment. The documents reviewed by the agency show that Binance provided investigators not only with the client’s identification details but also with information about his cryptocurrency transactions. This implies one very unpleasant thing for all cryptocurrency holders – the exchange sees far more than just your wallet address, and it is unclear how it will handle this information.
According to Binance’s privacy policy, the platform collects, amongst other things, your name, address, telephone number, nationality, date of birth, proof of residence, photographs, and may also process biometric data, KYC verification results and transaction history. Importantly, Binance’s privacy policy explicitly states that the company may disclose information to courts, law enforcement agencies and regulators in response to legal requests or under international legal assistance mechanisms.
Consequently, the issue of personal data protection within the European Union has now become particularly acute, as Bielenky resided in Bulgaria — one of the EU member states. The lawyers and human rights activists interviewed questioned whether the data transfer complied with the requirements of the GDPR. Despite this, Binance stated that it responds to legitimate requests from law enforcement agencies, although the legal assessment of a specific data transfer may depend on the jurisdiction, the status of the data controller and the grounds for the international transfer of information.
And this is just one aspect of the de-anonymisation of the crypto market. After all, from 1 January 2026, the DAC8 rules came into force in the European Union, obliging crypto service providers to collect data on transactions by users with links to the EU. The first reporting period covers 2026, although the full-scale transfer of information and its automatic exchange between tax authorities is not due to begin until 2027. The scope of the new rules extends not only to traditional cryptocurrencies, but also to stablecoins and certain NFTs.
This indicates that the days when an investor could regard their account on a crypto exchange as an ‘anonymous wallet’ are over. Blockchain may be pseudonymous, but an account on a centralised exchange is a complete digital dossier linked to KYC, documents, IP activity and transaction history. Consequently, this information can also be used against the investor.
At present, the outlook for crypto investors is bleak: if your assets pass through a centralised platform, the question of who, when and on what legal grounds might access them begins to act as a trigger.
