Binance under the scrutiny of US authorities. Is the world's largest cryptocurrency exchange circumventing the sanctions imposed on the Russian Federation?
The cryptocurrency giant could face serious problems in the US.
The largest cryptocurrency exchange - Binance - has recently become the subject of numerous attacks by the US Department of Justice (DoJ). Now the platform, led by Changpeng Zhao, is under intensive investigation for violations of the sanctions imposed on its clients from the Russian Federation. The theme of servicing Russian investors by digital currency trading platforms is increasingly appearing in the American media. It is worth adding that Binance is not the only entity that American officials accuse of such activities.
Is Binance circumventing US sanctions?
According to a report published on May 5 by Bloomberg, the US Department of Justice (DoJ) has taken intensive control measures against the Binance exchange. This is directly related to the ongoing investigation, which aims to determine whether this entity has not violated US regulations in connection with the sanctions imposed by the US on citizens of the Russian Federation following the armed attack on Ukraine.
The investigation, which has been classified as a national security matter, is ongoing at the same time as the investigation into the Binance exchange by the criminal investigation department. Among other things, the aforementioned cryptocurrency entity is facing serious allegations of violating anti-money laundering (AML) laws.
Due to a series of investigations by US officials, Binance limited its services to sanctioned citizens of the Russian Federation in April 2022. According to the data leaked to the public, the stock exchange continued to operate in eastern areas, admitting only entities and persons who were not subject to western sanctions.
The company has already issued a statement regarding the Bloomberg report, in which it said that all Western sanctions imposed on Russia and its citizens are being complied with. Exactly the same is true for all Know Your Customer (KYC) protocols. The company said they are in line with those for traditional banking. Binance said in this context that all users of the platform are subject to identity checks as well as place of residence.
“Our new customer policy has a zero-tolerance approach to dual sign-ups, anonymous identities, and unclear sources of money,” explains Binance.
Bloomberg also published information that Binance reportedly held a number of discussions with the Department of Justice regarding alleged accusations that the exchange violated the previous version of sanctions against Iran.
Binance is not the only cryptocurrency exchange that has problems with sanctions violations
American investigators have been intensively examining whether all entities related to digital currency trading support compliance with the sanctions imposed by the United States. It is worth adding here that Binance is not the only platform that is struggling with accusations of secretly serving investors from the Russian Federation.
Recently, digital currency exchange Polonie had to pay a $7.6 million fine as part of a settlement with the US Treasury Department's Office of Foreign Assets Control. This thread was about violations of sanctions against Crimea, Cuba, Iran, Sudan and Syria.