Binance has come under heat and is currently under investigation. The US Department of Justice National Security Division has begun investigating the Exchange to find out if it had granted Russian customers access to its services in violation of the US sanctions following Russia’s invasion of Ukraine.
The US Securities and Exchange Commission has also been investigating the Binance Exchange with two other firms owned by its founder Changpeng Zhao in early 2022. Binance has faced multiple inquiries in the United States which include Anti-money laundering and unlicensed money transmission.
Notably, neither the Exchange nor its executives have been accused of any crimes or violations at this time.
The Security and Exchange Commission, working alongside the Department of Justice, places its focus on the services that Binance provides or offers to its Russian Clients. Though the Exchange in compliance with the sanctions imposed on Russia restricted its services, it is still working in the region.
Also facing a lawsuit for violating Know Your Customer (KYC) protocols, the Exchange claims to be in compliance with both US and international sanctions. Binance noted their KYC protocols align with that of traditional banking, which subjects all customers to residency and identification checks alongside a zero-tolerance policy for mysterious sources of money and double registration.
Regarding the inquiry about extending its service to Russia, Binance executives claim that it is only available to individuals who are not sanctioned and remain inaccessible to areas that are outside the government’s control.
The exchange keeps coming under fire for violation of numerous local rules. Sen. Elizabeth Warren sent a letter to Zhao stating that his company is “a hotbed of illegal financial activity that has facilitated over $10 billion in payments to criminals and sanctions evaders,” and saying it’s been marked by “increasingly disturbing allegations regarding the legality of its operations.” Followed by a demand for the Company’s balance sheet and an evaluation of its corporate structure. Also, Israel revealed not long ago that it seized about 190 Binance accounts with alleged ties to terrorist groups including ISIS, though it is not clear that Binance had cooperated with the Israeli authorities, as they are not obliged to adhere to Israeli law.
The Binance exchange, however, is not the only one under scrutiny for violating sanctions. Poloniex paid $7.6 million in settlement to the U.S. Treasury Department’s Office of Foreign Asset Control for violating sanctions against Cuba, Iran, Sudan, and Syria.
Binance is one of the world’s largest and leading cryptocurrency exchanges and so it is no surprise that it would experience a few shortcomings regarding regulations and sanctions especially when such shortcomings are tied to customer accounts.
Written By Anthonymark
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