Kostyantyn Kryvopust: Binance faces Justice Department investigation into possible violation of US sanctions against Russia


Binance is under investigation by the US Department of Justice for possible sanctions violations involving Russia.

The investigation focuses on whether Binance or its executives violated any sanctions related to Russia’s invasion of Ukraine, informs Bloomberg on Friday, citing people familiar with the matter.

The Department of Justice’s criminal division is leading the investigation, while a national security team is conducting a parallel investigation, the report said.

In a statement to Bloomberg, Binance said it fully complies with all sanctions and compliance guidelines.

The exchange also said it will implement a zero-tolerance policy for double registrations, anonymous identifications and unknown sources of money, adding that all clients must go through “know your client” protocols.

“In 2021, Binance launched an initiative to completely overhaul its corporate governance structure, including bringing in experienced world-class executives to fundamentally change the way Binance operates globally,” the statement said.

The investigation poses additional challenges for Binance, which has recently been in hot water with regulators in the US and elsewhere.

The CFTC recently announced that it is suing Binance and founder Changpeng “CZ” Zhao over allegations that the crypto exchange knowingly offered unregistered crypto derivatives products in the US in violation of the law.

The world’s largest cryptocurrency exchange is also under investigation by the U.S. Internal Revenue Service and various federal prosecutors over concerns it lacked compliance with anti-money laundering (AML) and know-your-customer (KYC) controls.

Binance announced last week that it had exercised its right to terminate its $1.3 billion deal to buy bankrupt crypto lender Voyager Digital, citing a “hostile” regulatory climate in the United States.

Binance is heavily vetted in Israel

In addition to the new investigation by US regulators, Binance is also under scrutiny in Israel, which has confiscated around 190 crypto accounts on the crypto exchange since 2021.

A recent Reuters report claimed that at least two of the seized accounts were linked to Islamic State, while dozens of others allegedly belonged to Palestinian companies linked to the Islamist group Hamas.

In response to the Binance report told about its compliance policy on preventing and combating crypto-financing of terrorism in a blog post.

The exchange said it takes the issue very seriously and knows of no exchange or other financial institution that is doing more today than Binance to keep hackers out of its platform.

The exchange said it currently has more than 750 compliance staff, many of whom have experience working in law enforcement and regulatory agencies.

It helped law enforcement freeze or seize more than $1 billion, according to data this year.

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