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James Carter

May 6, 2023

Binance Faces DOJ Probe Over Possible Breach of US Sanctions on Russia

The United States Department of Justice is looking into possible violations of sanctions regarding Russia involving the cryptocurrency exchange Binance.

Binance Faces DOJ Probe

According to a story that was published on Friday by Bloomberg, which cited people familiar with the subject, the investigation is focusing on determining whether or not Binance or its officials violated any sanctions relating to Russia’s invasion of Ukraine.

According to the article, the investigation is being led by the criminal division of the Justice Department, and another examination into the matter is being carried out by the national security team.

Binance has sent a statement to Bloomberg stating that it abides by all requirements for compliance and the enforcement of sanctions in their entirety.

The exchange also noted that it has a zero-tolerance approach policy to double registrations, anonymous identities, and obscure sources of money and that all clients are expected to go through “know your customer” measures. In addition, the exchange stated that it has a zero-tolerance approach policy to double registrations.

According to the statement, “In 2021, Binance launched an initiative to completely overhaul its corporate governance structure. As part of this initiative, Binance brought in a world-class bench of seasoned executives to fundamentally change how Binance operates globally.”

Binance, which has recently found itself in trouble with regulatory authorities in the United States and other countries, faces extra difficulties as a result of the inquiry.

Binance and its founder Changpeng “CZ” Zhao, are being sued by the Commodity Futures Trading Commission (CFTC) over charges that the cryptocurrency exchange knowingly provided unregistered crypto derivative products in the United States in violation of the law. The lawsuit was just recently disclosed by the CFTC.

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Concerns have been raised over the extent to which the largest cryptocurrency exchange in the world adheres to Anti-Money Laundering (AML) and Know Your Customer (KYC) rules. These investigations are being conducted by the Internal Revenue Service in the United States as well as by a number of federal prosecutors.

A “hostile” regulatory climate in the United States was cited as the reason for Binance’s decision to exercise its right to terminate the $1.3 billion deal to buy bankrupt cryptocurrency lender Voyager Digital. This announcement was made by Binance one week ago.

Binance Faces Scrutiny in Israel

A new inquiry is being conducted by authorities in the United States, but Binance is also under review in Israel, which has frozen over 190 cryptocurrency accounts at the cryptocurrency exchange since 2021.

According to the recent article posted by Reuters, at least two of the seized accounts were purportedly associated with the Islamic State group, and dozens of the remaining accounts were allegedly owned by Palestinian companies related to the Islamist Hamas group.

In a blog post written as a response to the study, Binance addressed its compliance standards for preventing and combating terrorist organizations’ use of cryptocurrency to fund their activities.

The exchange has stated that it takes the matter very seriously and that it is not aware of any other exchange or other financial institution that does more today to prevent dishonest actors from using their platform than Binance does.

The exchange said that it presently has more than 750 people supporting compliance, a large number of whom have previous experience working for law enforcement or regulatory agencies.

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According to reports, it has already assisted law enforcement in freezing or seizing over one billion dollars so far this year.

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