Binance is reportedly facing yet another investigation by the US Department of Justice, and this time, it concerns possible violations of the sanctions imposed against Russia. According Bloomberg, the agency is investigating whether the cryptocurrency exchange allowed Russian clients to move money as a way to circumvent US sanctions on the country’s financial institutions. Sources from the news organizations also said that Binance is discussing the possibility of reaching an agreement with the DOJ regarding previous allegations that the exchange was also used to move money to circumvent US sanctions against Iran.
If you will remember, the United States and the European Union imposed sanctions against Russian financial institutions after the invasion of Ukraine. Mykhailo Federov, Deputy Prime Minister of Ukraine, called on major cryptocurrency exchanges to freeze all Russian and Belarusian accounts at the same time, but Binance was one of the companies that refused to do so. At the time, a spokesperson said that unilaterally banning people’s access to cryptocurrencies would “defeat the reason why cryptocurrencies exist,” because it would affect ordinary users and not just Russian oligarchs.
If the DOJ is indeed investigating Binance’s activities related to the Russian sanctions, then it is simply one of the investigations the exchange is dealing with. The Department of Justice and the Internal Revenue Service began investigating reports that Binance is being used for money laundering schemes in 2021. And earlier this year, the Commodity Futures Trading Commission (CFTC) charged Binance and its founder Changpeng Zhao (pictured above) for failing to ask users to verify their identities, offering unregistered crypto derivatives, and implementing measures to avoid US regulation. Binance told us at the time that it found the “unexpected and disappointing” charges.
This time he told her Bloomberg In a statement: “In 2021, Binance launched an initiative to completely overhaul its corporate governance structure, including bringing in a bank of world-class, seasoned executives to fundamentally change the way Binance operates globally.” The spokesperson added that the company now observes strict know-your-customer protocols similar to those used by traditional banks. “Our policy,” they said, “enforces 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 circumvent US sanctions.