The U.S. Department of Justice (DOJ) is investigating whether Binance was used illegally by Russians attempting to bypass U.S. sanctions.
As Bloomberg reported on Friday, the inquiry by the Justice Department’s national security division is looking into whether Binance complied with its obligations to prevent sanctioned individuals from using the exchange in such a manner.
In its response, Binance stated that its know your Customer (KYC) protocols rival those in the traditional banking system, and every customer is required to go through the controls. The statement added:
“Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money,”
Despite the exchange’s rhetoric, Binance did recently ease up limits placed on Russian users.
After curbing its service in the country following international sanctions, last month Binance started accepting payment with Russian bank cards. It also lifted a previous ban on Russian users holding crypto worth over 10,000 euros.
Binance Exchange’s Ongoing Sanctions Headache
Recent accusations are not the first time Binance has found itself in hot water over its use by sanctioned parties.
The Justice Department is also investigating the platform over similar claims that it enabled Iranians to skirt U.S. sanctions. Like Russia, Iran is subject to sweeping economic sanctions.
In fact, these are even more total to those imposed against Russia, and cryptocurrency exchanges are effectively banned from serving Iranian citizens or businesses.
In another recent instance of Binance being used to funnel money between sanctioned parties, this week it was reported that the Israeli National Bureau for Counter Terror Financing (NBCTF) has previously seized Binance accounts in its efforts to thwart funding for terrorist groups.
Neither authorities in the U.S. nor Israel have yet brought any charges against Binince and the firm has denied any wrongdoing.
The main question for the Justice Department’s national security division is whether the platform itself is imbricated in sanctions evasion. However, Bloomberg reported that the probe is being carried out in parallel with an existing inquiry by the criminal division.
Binance Faces-off With U.S. Authorities
Elsewhere in the Department of Justice, Binance is being investigated over potential anti-money laundering violations.
But as BeInCrypto has reported, in December, prosecutors were still split over whether they had enough evidence to bring charges.
Additionally, the Securities and Exchanges Commission (SEC) has claimed that Binance.US offers unregistered securities services. However, once again, there is little agreement as to how to move forward with the case. And across the U.S. political and legal system, there has been little support for the SEC’s position that crypto is covered by securities law.
Finally, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance in March. The CFTC started investigating Binance in 2021 over alleged unlawful trading.
Some Binance employees have since lawyered up as the commission makes its case against them.
Disclaimer
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