Binance is reportedly under investigation by the US Justice Department, this time for possible violations of sanctions imposed on Russia.
Bloomberg reports that the government is investigating whether the cryptocurrency exchange allowed Russian customers to shift money in order to avoid US restrictions on the country’s financial institutions.
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According to the news outlet’s sources, Binance is also contemplating the prospect of settling with the DOJ over previous charges that the exchange was allegedly used to transport money to skirt US sanctions against Iran.
Following the invasion of Ukraine, the United States and the European Union slapped sanctions on Russian financial institutions. Ukraine’s Vice Prime Minister, Mykhailo Federov, ordered major crypto exchanges to freeze all Russian and Belarussian accounts at the same time, but Binance was one of the companies who refused.
A spokeswoman at the time stated that unilaterally prohibiting anyone from accessing Bitcoin “would fly in the face of the reason why crypto exists,” because it would affect average users, not just Russian oligarchs.
If the DOJ is actually investigating Binance’s conduct in relation to Russian sanctions, it is only one of the issues the exchange is dealing with. In 2021, the DOJ and the IRS began investigating accusations that Binance was being utilised for money laundering activities.
The Commodity Futures Trading Commission (CFTC) accused Binance and its creator Changpeng Zhao (shown above) earlier this year of not requiring customers to authenticate their identities, offering unregistered crypto derivatives, and taking tactics to bypass US regulation.
Binance said at the time that the allegations were “unexpected and disappointing.”
This time, it told Bloomberg in a statement, “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.”
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The spokesperson continued that the company now observes strict know-your-customer protocols similar to the ones employed by traditional banks.
They said, “Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money,” While they didn’t specifically address the allegations, the statement sounds like a denial that the company’s service allowed Russian users to flout US sanctions.
