![]() Reuters reported that the exchange’s defense attorneys met with DOJ officials and discussed potential plea deals.īinance argued that a criminal prosecution would have negative effects on a crypto market already crushed by the collapse of blockchain project Terra and mega exchange FTX’s bankruptcy last year, according to Reuters. In December, news dropped that Justice Department prosecutors were weighing up whether to aggressively go after the exchange or take time to review more evidence. The investigation also involves the IRS, and is focused on both Binance’s compliance with anti-money laundering laws and sanctions as well as potential tax offenses, according to a May 2021 report from Bloomberg. Officials from the Department of Justice have been investigating Binance in 2018, according to Reuters. Zhao responded to the CFTC lawsuit on Twitter by suggesting he thinks the 74-page complaint is merely an attempt at spreading “FUD” (fear, uncertainty, and doubt.)ĪD Long-running Department of Justice and IRS cases It’s a pretty serious case-and if the regulator’s penalties stick, legal experts say it could significantly impact the company’s business in the U.S., or even globally, as the CFTC not only wants to hit the defendants mentioned in the lawsuit with fines, but also ban them from trading altogether. In its lawsuit this week, the regulator claims that the exchange’s 300 house accounts are exempt from its “a relatively new ‘insider trading’ policy.” By September 2021, that investigation had been expanded to include allegations of insider trading. markets in early 2021, according to a report from Bloomberg at the time. The CFTC first began investigating Binance over allegedly unlawful trading practices in U.S. The CFTC claims Zhao used his own companies to engage in proprietary trading activity on Binance via 300 “house accounts” but did not disclose this activity. clients dodge regulators-and even traded against its own customers. The lawsuit further claims that Binance knowingly evaded or helped U.S. Its anti-money laundering (AML) and know-your-customer (KYC) controls were not good enough, the CFTC also alleges. The CFTC lawsuit targets not just Binance but also CEO Changpeng Zhao and ex-chief compliance officer Samuel Lim.Īccording to the CFTC, Binance has not taken compliance seriously enough: the company allegedly committed multiple trading derivatives violations, including not being properly registered to offer derivatives to American clients, and it didn’t supervise activity on its exchange sufficiently. ![]() “Binance has taken a calculated, phased approach to increase its United States presence despite publicly stating its purported intent to ‘block’ or ‘restrict’ customers located in the United States from accessing its platform,” the Commission stated. and “chose to ignore” rules designed to block Americans from using the service and trading unregistered crypto derivatives products. The investigation by the DOJ reportedly began in 2018, and has homed in on Binance's compliance with US anti-money laundering laws and sanctions.The lawsuit claims that Binance, its CEO Changpeng Zhao, and other employees at the exchange solicited customers in the U.S. The exchange told Reuters that it is "driving higher industry standards" and looking to "further improve our ability to detect illegal crypto activity on our platform." The crypto giant disputed the report, adding that the calculations and claims of its compliance control weren't accurate. A Binance spokesperson told Insider that it would be "inappropriate for us to comment" on matters related to the DOJ.Īdditionally, Reuters reported that Binance processed over $10 billion in illegal payments this year, and sought to "evade" regulators. The DOJ has also discussed potential plea deals with Binance's legal team, the report said. ![]() US prosecutors are looking into Binance on money laundering conspiracy, unlicensed money transmission, and criminal sanctions violations, four sources told the news outlet. The US Department of Justice is reportedly investigating the world's largest cryptocurrency exchange, Binance, according to Reuters. ![]()
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