Binance Reportedly Investigated in US for Russia Sanctions Violations

Cryptocurrency exchange Binance is facing a U.S. probe over suspected violations of sanctions against Russia, according to a media report. The inquiry is looking into whether the trading platform was used by Russians to circumvent financial restrictions imposed over Moscow’s invasion of Ukraine.

The U.S. Department of Justice (DOJ) is trying to establish if Binance Holdings, the operator of the world’s largest crypto exchange, has been used to allow Russians to evade Western sanctions, Bloomberg revealed, quoting multiple sources familiar with the matter.

According to five people who chose to remain anonymous, the Department’s national security division is looking at whether the company or its officials have violated restrictions introduced in relation to Russia’s invasion of Ukraine as part of a confidential investigation.

“The probe, which hasn’t previously been reported, is moving on a parallel track with an existing inquiry by the criminal division, one of the people said,” the report detailed, noting that the move adds another layer of scrutiny of the troubled industry’s leading exchange.

The news comes after Russian crypto media reports in late April suggested that Binance has quietly lifted some restrictions on Russian users. According to the information published by different news outlets, Russians can again use their bank cards to make deposits and the trading platform has canceled a limit on their balances introduced in compliance with EU sanctions.

Binance has been in talks with the DOJ in an attempt to resolve complaints related to previous allegations that it was used to bypass sanctions against Iran before introducing stricter compliance controls, Bloomberg added, quoting another person familiar with these developments. In a statement, the company emphasized it complies fully with all U.S. and international sanctions, elaborating:

In 2021, Binance launched an initiative to completely overhaul its corporate governance structure, including bringing in a world-class bench of seasoned executives to fundamentally change how Binance operates globally.

It also pointed out that its know-your-customer protocols rival any in the traditional banking system and every Binance user is required to pass these procedures which include verifying country of residence and checking personal identification.

“Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money,” the exchange stressed. The U.S. Justice Department has so far declined to comment.

Binance has been in the focus of other U.S. investigations, including a probe into its compliance with anti-money laundering requirements led by the Internal Revenue Service and a lawsuit filed by the Commodity Futures Trading Commission. The Securities and Exchange Commission has been examining if the platform supported the trading of unregistered securities.

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