Bloomberg reports that the U.S. Department of Justice’s national security division is investigating Binance. They want to find out if Binance let Russian customers use their exchange, which would go against U.S. sanctions due to Russia’s invasion of Ukraine.
Following a previous investigation in 2021 conducted by the Internal Revenue Service, the U.S. Justice Department is now looking into Binance once again. The U.S. Securities and Exchange Commission (SEC) has also been investigating Binance since early 2022 regarding its founder Changpeng Zhao’s connection to two affiliated companies.
Binance and the Justice Department have not responded to requests for comment at this time.
The Justice Department chose not to provide a comment in response to Bloomberg’s inquiry.
According to a statement given to Bloomberg by Binance, the company claims to comply completely with both U.S. and international financial sanctions. Additionally, in late March 2023, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, accusing the company of knowingly providing unregistered cryptocurrency derivative products in the U.S., which is against federal law.
Binance has consistently defended itself against the allegations by highlighting the size of its compliance team, which it claims is the largest in the industry. With a team of 700 members, Binance’s head of compliance, Tigran Gambaryan, stated that they handle around 1,300 law enforcement requests every week.
Binance has recently stated that they have found a way to prevent North Koreans from accessing their cryptocurrency exchange. They claim to have taken strong actions that made it clear to North Koreans that Binance was not the right platform for them.
According to reports, Israel announced in early May 2023 that it had taken control of approximately 190 Binance accounts that were believed to have connections to terrorist organizations, including two accounts associated with ISIS. It is unclear how Israel was able to seize these accounts on Binance without explicit cooperation from the exchange. Binance is not obligated to follow Israeli laws, making the situation puzzling.