The United States Department of Justice (DOJ) has launched a probe into Binance, the world’s largest cryptocurrency exchange, over possible violations of sanctions against Russians, Bloomberg reported Friday, citing sources familiar with the matter.
Binance Faces Probe for Sanctions Violations
According to the report, the DOJ’s national security division is investigating whether the Binance platform is being used to evade sanctions related to Russia’s invasion of Ukraine. The division is checking to see if the company’s employees are aiding Russians in moving funds through the exchange.
The inquiry is moving alongside an existing probe by the DOJ’s criminal division into the leading crypto exchange. Binance has also been in talks with the department to settle previous complaints about its platform being used to sidestep sanctions against Iran before strong compliance controls were implemented.
In response to questions about the DOJ’s probe, Binance said: “In 2021, Binance launched an initiative to completely overhaul its corporate governance structure, including bringing in a world-class bench of seasoned executives to fundamentally change how Binance operates globally.”
The exchange insisted that it is in full compliance with all US and international financial sanctions and that its Know Your Customer (KYC) procedures rival any in the traditional banking system. All users must go through the protocols, which involve divulging information about their country of residence and personal identification checks.
“Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money,” the leading exchange added.
Binance Under Scrutiny
One of the sources further disclosed that there was no indication that the DOJ was getting ready to agree to a non-prosecution or deferred-prosecution settlement with Binance, just like agencies do in certain cases.
The DOJ’s probe into Binance adds to a list of investigations from several regulators into the exchange’s mode of operations. Despite the platform’s claims of fulfilling legal obligations and collaborations with law enforcement, it has been under intense scrutiny from regulatory agencies.
In May 2021, the Internal Revenue Service (IRS) and the DOJ launched a probe into Binance for money laundering and tax evasion. A little over a month ago, the Commodity Futures Trading Commission (CFTC) charged the exchange with violating federal trading laws.
In addition, the Securities and Exchange Commission (SEC) also examined whether the crypto exchange offered unregistered securities during its initial coin offering (ICO) in 2017.
