The United States Department of Justice (DOJ) National Security Division is reportedly investigating Binance, the world’s largest cryptocurrency exchange, for potentially allowing Russian customers to trade on its platform in violation of US sanctions. These sanctions are in place due to Russia’s invasion of Ukraine. This investigation adds to the growing scrutiny faced by Binance from various regulatory agencies in the United States.
Justice Department Inquiry: A New Challenge for Binance
This inquiry by the Justice Department comes on the heels of a 2021 joint investigation with the Internal Revenue Service (IRS) targeting the global exchange. Furthermore, the US Securities and Exchange Commission (SEC) has been probing Binance’s relationship with two firms owned by its founder, Changpeng Zhao, since early 2022. The Justice Department, however, declined to comment on the matter when approached by Bloomberg.
In response to the allegations, Binance stated to Bloomberg, claiming full compliance with all US and international financial sanctions. In addition, the company has repeatedly defended itself against these accusations, citing its robust compliance measures.
In March 2023, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, alleging that the company knowingly offered unregistered cryptocurrency derivatives products in the US, violating federal law.
Binance countered these allegations by highlighting its extensive compliance team, which reportedly comprises 700 members, addressing 1,300 law enforcement requests every week, as stated by head of compliance Tigran Gambaryan.
Binance’s Efforts to Deter North Korean Access
Binance has also claimed to have successfully deterred North Korean access to its platform. The company states that it has made it abundantly clear that their exchange is not a suitable place for them. That has been seen as an attempt to showcase the company’s commitment to adhering to international regulations and maintaining a secure trading environment.
In another development, Israel reportedly seized approximately 190 Binance accounts in early May 2023, alleging connections to terrorist groups, including two accounts linked to ISIS.
However, the extent of Binance’s cooperation in this matter remains unclear, as neither Israel nor Binance has explicitly confirmed the exchange’s involvement. Moreover, considering that Binance is not obligated to adhere to Israeli laws, the exact process of these accounts being seized remains uncertain.
The recent US Department of Justice inquiry into Binance’s potential sanctions violations demonstrates the growing regulatory scrutiny the cryptocurrency exchange faces.
As Binance navigates these challenges, it continues to assert its commitment to compliance and security, striving to maintain its status as a global leader in the cryptocurrency space.
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