Binance is reportedly under investigation by the United States Depart of Justice (DoJ) Department’s national security division over suspicions of illegally allowing Russians to evade sanctions and move money through the exchange.
Binance accused of breaching Russian sanctions
According to five sources who wish to remain anonymous, the investigation aims to unveil whether Binance or any of its officials violated sanctions relating to Russia’s invasion of Ukraine. One of the individuals also mentioned that the probe is proceeding concurrently with an ongoing criminal division inquiry.
The inquiry puts Binance under even more scrutiny as it recovers from high-profile scandals and failures in the crypto industry.
According to a different source, the exchange has been in discussion with the DoJ to address earlier accusations. Earlier, the platform was allegedly used to bypass Iranian sanctions before stringent compliance procedures were in place.
In a statement, Binance asserted that it had not violated financial sanctions imposed by the United States and other countries. They also emphasized it has strict know-your-customer (KYC) standards, comparable to those used by traditional banking systems. As such, Binance demands clients to verify accounts using their legal resident country’s identification checks.
Binance also added that its policy enforces a zero-tolerance stance to duplicate registrations, anonymous identities, and mysterious funding sources.
However, despite the ongoing investigations, the DoJ has not commented on the inquiry.
Binance accounts seized over terrorist affiliation suspicions
The inquiry into Binance comes when authorities and law enforcement organizations want cryptocurrency exchanges to abide by laws against money laundering and terrorism funding.
One such occurrence saw the Israeli government recently shut down dozens of crypto accounts that it had flagged as suspicious.
The events saw about 190 Binance accounts seized by Israel’s National Bureau for Counter Terror Financing (NBCTF) on claims that the accounts were allegedly linked to the Palestinian organization, Hamas. It is also suspected that two of the accounts belonged to the terrorist group ISIS.
It remains to be seen what the outcome of the investigation will be and whether Binance will face any penalties or fines.
However, the investigation indicates that regulators closely monitor the cryptocurrency industry and will act against non-compliant operators.