According to recent reports, the United States Department of Justice is conducting yet another investigation into the cryptocurrency exchange Binance. This time, the dispute is on potential sanctions violations that have been placed against Russia. According to Bloomberg, the agency is reportedly investigating whether or not the cryptocurrency exchange enabled customers in Russia to shift money to circumvent US sanctions imposed on the country’s banking institutions. According to sources cited by the news media, Binance is reportedly in talks with the Department of Justice (DOJ) about the prospect of settling earlier charges that the exchange was also used to shift money to bypass US sanctions against Iran.
You may recall that in response to Russia’s invasion of Ukraine, the United States and the European Union put sanctions on Russian financial institutions. The Vice Prime Minister of Ukraine, Mykhailo Federov, has requested that major cryptocurrency exchanges suspend access to all accounts held in Russia and Belarus simultaneously. Binance was one of the companies that needed to comply with this demand. During that time, a spokeswoman for the organization stated that unreasonably restricting people’s access to cryptocurrencies “would fly in the face of the reason why crypto exists” because it would impact regular users and Russian oligarchs.
Imagine for a moment that the DOJ is investigating the activities of Binance about the Russian sanctions. If this is the case, then it is only one of the investigations the exchange is working on. In 2021, the Department of Justice and the Internal Revenue Service (IRS) began looking into accusations that Binance was used for money laundering schemes. In addition, the Commodity Futures Trading Commission (CFTC) filed charges against Binance and its creator Changpeng Zhao earlier this year. The charges allege that Binance did not require users to verify their identities, offered unregistered crypto derivatives, and implemented tactics to avoid compliance with US regulations. Binance conveyed to us that it discovered the accusations to be “unexpected and disappointing.”
This time, the company shared the following information with Bloomberg: “In 2021, Binance launched an initiative to completely overhaul its corporate governance structure, including bringing in a world-class bench of seasoned executives to change how Binance operates globally fundamentally.” The representative went on to say that the organization now adheres to stringent know-your-customer policies in a manner that is comparable to that which conventional banks use. They added that “our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money,” and “our policy imposes a zero-tolerance approach to double registrations.” Even though they did not directly answer the claims, the statement reads like a denial of the claim that the company’s service enabled Russian users to circumvent US sanctions. This is even though they did not directly address the charges.