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US prosecutors have been investigating Binance’s anti-money laundering compliance, operations and internal communications since December 2020, Reuters report Sept. 1, citing people familiar with the investigation.
The U.S. Department of Justice has reportedly voluntarily provided records of communications involving founder Changpeng Zhao and 12 other executives and partners over detecting illegal transactions and acquiring U.S.-based clients. I sent a letter requesting the exchange to the exchange.
Prosecutors also requested company records that included instructions to destroy files or transfer records out of the United States, according to the report.
The regulator requested information about Binance’s US operations and also asked for details of its anti-money laundering and sanctions compliance measures.
The request was based on an investigation into the exchange’s compliance with bank secrecy laws, according to the report. By law, cryptocurrency exchanges in the United States must register with the Treasury Department and comply with anti-money laundering laws.
Reuters reported that the Department of Justice’s 2020 letter called for documents related to “business grounds” in establishing Binance.US.
The regulator has reportedly asked Zhao and 12 executives, including co-founder Yi He and chief compliance officer Samuel Lim, about the relationship between Binance and Binance.US.
Binance.US was launched in 2019 by Binance (parent company) and is registered with the US Treasury Department.
But the parent company’s opaque structure has baffled regulators around the world, who have repeatedly warned users about the exchange.
The Dutch Central Bank recently fined the company more than 3 million for violating financial laws.
Meanwhile, Binance has stepped up its regulatory compliance measures and has received several approvals from regulators in Italy, France, Dubai and other countries.
Reuters also revealed that the Securities and Exchange Commission (SEC) has submitted a subpoena to BAM Trading Services, the operator of Binance.US.
According to a Reuters report, the subpoena asked what services BAM provided to Binance.US and whether there were any employees who also worked at the parent company’s exchange.
Reuters was unable to determine how Binance responded to the regulator’s request.
Meanwhile, Binance Chief Communications Officer Patrick Hillman was quoted as saying:
Regulators around the world are reaching out to all major crypto exchanges to better understand the industry. We will work with the agency to address any questions they may have.
Hillman added that the exchange had a compliance team made up of former regulators and law enforcement officials.
Changpeng Zhao also tweeted that the exchange is compliant with 2020 regulatory requirements.
Another story today about crypto companies getting inquiries from regulators. A request was made to voluntarily share certain information in 2020. It is important for the industry to build trust with regulators.
Anyway, my chat messages are semi-public. pic.twitter.com/h35Xd4tZhf
CZ Binance (@cz_binance) September 1, 2022
