The United States Justice Department’s national security and crime division are investigating the cryptocurrency exchange provision of services to Russia. Bloomberg confirms this news with a report on May 5.
Binance is under investigation by the DOJ national security division for allowing Russians to use the crypto exchange, even though it violates the United States sanctions on Russia. There are no accusations against the company or any of its executive members in connection with the investigation.
According to five unnamed sources cited by the news service, the national security investigation is being conducted parallel with a criminal division investigation. In the United States, Binance is among the targets of multiple investigations, including a DOJ investigation into Anti-Money-Laundering (AML) violations.
Sanctions
Sanctions on Russia were imposed in April 2022, and since then, Binance has limited its services to the country. According to a company executive, the company continued to operate in Russia, blocking only some regions of Ukraine that were no longer under government control and only serving non-sanctioned individuals.
The Justice Department is investigating whether Binance was used illegally to let Russians skirt US sanctions and move money through the world’s biggest cryptocurrency exchange https://t.co/AVgG55iSmx
— Bloomberg Crypto (@crypto) May 5, 2023
The United States Commodity and Futures Trading Commission also filed a lawsuit against Binance in March. They accused Binance of Know Your Customer (KYC) and AML violations.
In a statement to Bloomberg, the company said it was with the United States and international sanctions, and its KYC protocols conform with those of the traditional banking system. The company stated that they subject every customer to identity and residence verification. Moreover:
“Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money.”
In addition, Bloomberg states that Binance is discussing with the DOJ about complaints that it had violated earlier versions of sanctions against Iran.
But, Binance is not the only cryptocurrency exchange facing sanctions violation scrutiny. Poloniex has paid $7.6 million in a settlement to the United States Treasury Department’s Office of Foreign Asset Control. According to an announcement on May 1, they violated sanctions against Crimea, Cuba, Iran, Sudan, and Syria.
