The US Justice Department (DOJ) is looking into possible sanctions violations at the cryptocurrency exchange Binance. According to reports, the DOJ is looking into whether Binance allowed Russian users to transfer money in defiance of US restrictions imposed on the nation’s financial institutions. According to reports, the exchange and the DOJ are currently in discussions addressing prior accusations that money was shifted in order to circumvent US sanctions against Iran.
Financial institutions in Russia are subject to sanctions
The United States and the European Union slapped sanctions against Russian financial institutions in response to Russia’s invasion of Ukraine. Vice-premier of Ukraine Mykhailo Federov demanded that major cryptocurrency exchanges immediately freeze any accounts belonging to citizens of Russia and Belarus. Binance refused, saying that it would not unilaterally forbid anyone from using cryptocurrencies.
Additional Examinations of Binance
In response to allegations that Binance was being utilized for money laundering operations, the DOJ and the Internal Revenue Service opened an inquiry in 2021. The Commodity Futures Trading Commission (CFTC) accused Binance and its creator, Changpeng Zhao, of marketing unregistered cryptocurrency futures, failing to request customer identity verification, and taking steps to evade US regulation earlier this year. Binance rejected the accusations.
According to Binance, it started a thorough makeover of its corporate governance structure in 2021. This included hiring seasoned executives to change how the exchange functions internationally. As with traditional banks, the firm now follows strict know-your-customer procedures. According to the spokesperson, Binance has a zero-tolerance policy on duplicate registrations, unknown identities, and mysterious funding sources. Despite not addressing the claims, the response sounded like a denial that the exchange’s services allowed Russian users to get under US restrictions.
In conclusion, Binance’s denial of the accusations raises the possibility that the transaction did not contravene US sanctions on Russia. The DOJ is still looking into the business, and it has already run into legal problems. It is still unclear how the DOJ’s probe will turn out.
Source: ©Anthony Kwan/Bloomberg via Getty Images ; Bloomberg
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