The world’s largest cryptocurrency exchange, Binance, is once again under scrutiny, this time by the US Justice Department’s national security division. The investigation is centered on Binance’s possible involvement in allowing Russians to bypass US sanctions and move money through the exchange.
According to Bloomberg News, the DOJ is looking into whether Binance or its officials acted improperly with regards to the sanctions related to Russia’s invasion of Ukraine. This latest development adds to the mounting pressure on Binance, which has faced legal action from regulators in recent months.
Binance has been sued by the US Commodity Futures Trading Commission for offering unregistered crypto derivative products in the US. Additionally, the exchange is being investigated by the US Internal Revenue Service over concerns about its adherence to anti-money laundering and know-your-customer controls.
However, Binance maintains that it complies with all US and international financial sanctions. The company stated in a response to Bloomberg that it launched an initiative in 2021 to overhaul its corporate governance structure and bring in a world-class bench of seasoned executives to fundamentally change how it operates globally.
Separately, in a blog post before the news of the DOJ probe broke, Binance addressed its compliance policies for preventing and tackling crypto-based financing of terrorism. The company stated that it takes this issue seriously and claimed that it was not aware of any exchange or financial institution that does more today to keep bad actors off their platform than Binance.
Binance founder Changpeng Zhao, also known as CZ, has not yet commented on the Justice Department investigation. However, he did tweet “4” in response to the CFTC allegations, which is his own code for reporting on things he does not agree with.
As the world’s largest crypto exchange, Binance’s operations are closely watched by regulators around the world. The DOJ probe is just the latest example of the increasing regulatory scrutiny that Binance and other crypto exchanges are facing. The outcome of this investigation could have significant implications for the crypto industry as a whole.
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