Binance is facing a probe by the US Justice Department’s national security division over possible sanctions violations related to Russia’s invasion of Ukraine. Bloomberg reported the inquiry on May 5, citing unnamed sources.
Alleged Sanctions Breaches
According to the report, the Justice Department is investigating whether Binance or its executives breached US sanctions by allowing Russian individuals or entities to use the exchange to launder money or evade sanctions. The probe is said to be in its early stages and no formal accusations or charges have been made against the exchange.
Binance has not yet commented on the report, but the exchange has faced regulatory scrutiny in several jurisdictions in recent years. In the US, the Commodity Futures Trading Commission and the Securities and Exchange Commission have both investigated the exchange over potential violations of securities and derivatives trading rules.
The news of the Justice Department’s inquiry comes amid heightened tensions between the US and Russia over Ukraine, with the US and its allies imposing economic sanctions on Russia in response to its annexation of Crimea in 2014 and its involvement in the ongoing conflict in eastern Ukraine.
Cryptocurrency exchanges have been a focus of regulators around the world in recent years, as they seek to crack down on illicit activities such as money laundering, terrorist financing, and tax evasion. Binance, which is headquartered in Malta but has offices in several countries, has faced accusations of lax regulatory compliance and inadequate anti-money laundering measures.
In response, the exchange has sought to improve its compliance efforts and has hired a number of former regulators and law enforcement officials in recent months. In March, Binance announced that it had hired Greg Monahan, a former US Treasury Criminal Investigator, to head its global money laundering compliance program.
The outcome of the Justice Department’s inquiry remains uncertain, but it is clear that Binance is facing increased regulatory scrutiny over its operations. As the cryptocurrency industry continues to grow and mature, exchanges will likely face increasing pressure to comply with regulatory requirements and ensure that their platforms are not being used for illicit purposes.