Binance Reportedly Investigated in US for Russia Sanctions Violations – Bloomberg reported that several sources with knowledge of the matter stated that the U.S. Department of Justice (DOJ) is investigating Binance Holdings, the world’s largest cryptocurrency exchange operator, to determine if it has been utilized to facilitate Russian individuals in avoiding Western sanctions. The DOJ’s national security division is conducting a confidential investigation to determine if the company or its executives have violated the restrictions that were implemented in response to Russia’s incursion into Ukraine, as per the anonymous sources.
“The probe, which hasn’t previously been reported, is moving on a parallel track with an existing inquiry by the criminal division, one of the people said,” the report detailed, noting that the move adds another layer of scrutiny of the troubled industry’s leading exchange. In late April, reports from Russian cryptocurrency media suggested that Binance had relaxed some of its restrictions on Russian users.
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This news follows reports that Russians can now use their bank cards to make deposits, and the trading platform has eliminated the balance limit that was imposed to comply with EU sanctions, according to various news outlets. According to an additional source familiar with the matter, Binance has been engaged in discussions with the DOJ to address prior accusations that it facilitated the circumvention of sanctions against Iran.
Bloomberg reported that the company has implemented more rigorous compliance measures in response to these complaints. In a statement, the company emphasized it complies fully with all U.S. and international sanctions, elaborating: “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.”
Binance highlighted that its know-your-customer (KYC) protocols are as stringent as those in the traditional banking system. Every user is required to go through these procedures, which involve verifying their country of residence and checking personal identification. The exchange emphasized that it has a zero-tolerance policy towards double registrations, anonymous identities, and dubious sources of funds. The U.S. Justice Department has not commented on the matter.
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Binance has also been the subject of other U.S. investigations, including a probe by the Internal Revenue Service into its compliance with anti-money laundering requirements and a lawsuit filed by the Commodity Futures Trading Commission. Additionally, the Securities and Exchange Commission has been examining whether the platform facilitated the trading of unregistered securities.