The US Justice Department is investigating Binance Holdings Ltd., the world’s largest cryptocurrency exchange, over allegations of using the platform to transfer money and evading Russian sanctions. The national security division is conducting the inquiry to determine if Binance or its officials violated sanctions related to Russia’s invasion of Ukraine.
The investigation comes at a time when the concerns are growing over the use of cryptocurrencies to facilitate illegal activities such as money laundering and terrorism financing.
Binance has not yet responded to the allegations, but its founder Changpeng Zhao has previously denied the possibility of cryptocurrencies being used to evade sanctions, emphasizing their traceability.
Binace Criminal Investigation
Sources at Bloomberg have revealed that the Justice Department’s national security division is currently investigating Binance and its officials for possible violations of sanctions related to the Russian invasion of Ukraine. The sources have also confirmed that this investigation was not previously disclosed and is being carried out in tandem with an ongoing investigation initiated by the criminal division.
It is expected that Binance CEO Changpeng Zhao will address the allegations to alleviate any concerns, but he has not yet commented on the matter. The investigation is taking place during a time of respite and recuperation for the cryptocurrency market, which has previously faced various setbacks and insolvencies.
Furthermore, the cryptocurrency exchange has also reportedly entered into discussions with the authorities to resolve previous issues linked to allegations of supporting Iran in evading sanctions. The exchange had previously issued a statement asserting its compliance with all relevant financial regulations in the United States and across the world.
Binace Facing Constant Scrutiny
It is important to note that earlier, Binance has faced scrutiny from multiple criminal and regulatory investigations. Changpeng Zhao (CZ) and three other entities are also facing a lawsuit from the Commodity Futures Trading Commission (CFTC) for allegedly running a cryptocurrency exchange that violates the Commodity Exchange Act (CEA) and CFTC regulations.