Binance is under investigation by the United States Department of Justice (DOJ) national security division for allowing Russians to use the cryptocurrency exchange in violation of U.S. sanctions, according to a report that appeared in Bloomberg on May 5. There have been no accusations against the company or its executive in connection with the investigation.
The national security probe is being carried out in tandem with a criminal division investigation, the news service said, citing five unnamed sources. Binance is the object of several investigations in the United States, including a DOJ inquiry into Anti-Money Laundering (AML) violations.
Binance limited services to Russia after sanctions were imposed on the country in April 2022. Still, it continued operating there, blocking only areas of Ukraine that were no longer under government control and servicing only non-sanctioned individuals, according to a company executive speaking to Cointelegraph.
The Justice Department is investigating whether Binance was used illegally to let Russians skirt US sanctions and move money through the world’s biggest cryptocurrency exchange https://t.co/AVgG55iSmx
— Bloomberg Crypto (@crypto) May 5, 2023
Binance has also been accused of Know Your Customer (KYC) and AML violations in a suit brought by the U.S. Commodity and Futures Trading Commission in March.
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The company did not reply immediately to an inquiry from Cointelegraph, but it told Bloomberg in a statement that it was compliant with U.S. and international sanctions, and its KYC protocols are in line with those of traditional banking. Every customer is subject to identity and residency checks, it said. Furthermore:
“Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money.”
In addition, according to Bloomberg, Binance “has been in discussions” with the DOJ about complaints that it had violated a previous version of sanctions against Iran.
Binance is not the only crypto exchange to face sanctions violation scrutiny. Poloniex paid a $7.6 million settlement to the U.S. Treasury Department’s Office of Foreign Asset Control for violating sanctions against Crimea, Cuba, Iran, Sudan and Syria, according to a May 1 announcement.
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