Binance Holdings Ltd., the world’s largest cryptocurrency exchange, is reportedly being investigated by the US Department of Justice over allegations that it facilitated the circumvention of American sanctions by Russian individuals.
Sources familiar with the matter, who spoke on the condition of anonymity due to the investigation’s sensitivity, revealed that the Justice Department’s national security division is examining whether Binance or its executives violated sanctions imposed in response to Russia’s annexation of Ukraine.
The investigation is being conducted alongside an existing criminal division inquiry, according to insiders.
The probe’s emergence highlights the mounting pressure on Binance, which has been plagued by a series of high-profile scandals and bankruptcies.
The crypto exchange has previously been under the scrutiny of the Justice Department, having faced allegations that it enabled Iranians to evade US sanctions before implementing stronger compliance controls.
Sources suggest that Binance has been engaged in discussions with the Justice Department to resolve these complaints.
Binance has responded to the allegations by stating that it adheres fully to all international and US financial sanctions.
“In 2021, Binance launched an initiative to completely overhaul its corporate governance structure, including bringing in a world-class bench of seasoned executives to fundamentally change how Binance operates globally,” the statement said.
Binance has claimed that its “know your customer” (KYC) protocols are as robust as those employed by traditional banking systems.
The company maintains that all of its customers must pass through these measures, which encompass checks on personal identification and country of residence.
Binance’s KYC policies are a fundamental component of its compliance controls, which have come under scrutiny in the wake of allegations that the exchange facilitated sanctions evasion by Iranian and Russian actors.
Despite these claims, Binance has emphasized its commitment to rigorous KYC measures and regulatory compliance.