US DOJ Investigates Binance Over Violations of Russia Sanctions

Binance, the world’s biggest crypto exchange platform, has been investigated for allegedly breaking sanctions against Russia following its invasion of Ukraine.

According to reports from Bloomberg, the investigation which is said to be led by the Department of Justice (DOJ) is focused on whether Binance allowed Russian citizens to use its platform to trade cryptocurrencies in violation of US sanctions against Russia.

Changpeng Zhao Defends Binance

Although Binance has not yet issued a formal statement on the issue, the CEO, Changpeng ‘CZ’ Zhao had previously emphasized that it is dedicated to compliance with all applicable laws and regulations in the countries in which it operates.

Additionally, he stated that the corporation has stringent Anti-Money Laundering and Know-Your-Customer measures in place to prevent illegal behavior on its platform.

Binance Could Face Penalties

At this moment, it is unknown what the inquiry’s potential ramifications for Binance would be, or how long the probe is likely to last. However, if the claims are proven to be genuine, Binance may face substantial fines and other punishments.

The US Sanctions Against Russia

Following Russia’s invasion of Ukraine, President Biden issued an Executive Order enabling sanctions against individuals and entities implicated in Ukraine’s invasion, as well as those who offer material assistance to Russia’s government.

The Executive Order authorizes the imposition of penalties on persons and businesses engaged in a wide range of activities, including those in the financial, energy, and defense sectors.

Additionally, the White House asked crypto exchanges operating in the country to ban Russians sanctioned by the US and its allies from using digital assets.

Binance Placed On Regulators Radar

Meanwhile, the exchange platform was said to have had conversations with the DOJ to address earlier accusations that the platform was used to circumvent Iranian sanctions.

In 2018, the United States strengthened sanctions imposed on Iran prior to its nuclear deal with world powers in 2015. Binance worked to implement the restriction that year, informing Iranian traders that they could no longer trade on the site. At the time, they were then instructed to close their accounts and withdraw all of their assets. 

Despite its efforts, seven Iranians admitted to utilizing the crypto market to circumvent the sanctions, insisting that their Binance account has remained active since then. 

Their accounts were only terminated after Binance implemented its AML and KYC policies.