believed to have alleged money laundering, tax evasion and US sanctions violations, Binance has been under investigation by the US Department of Justice since 2018 but has never been formally charged with wrongdoing. Now, Reuters reports that some federal prosecutors believe they have amassed enough evidence to bring criminal charges against Binance — including individual charges against Binance founder Changpeng Zhao — but other DOJ officials are standing in the way.
Reuters reviewed Binance’s records and spoke to nearly a dozen sources to compile a “comprehensive” progress report detailing the DOJ’s investigation so far. Sources included former Binance advisers, as well as current and former US law enforcement officials. These sources told Reuters that prosecutors spread across three DOJ offices – the Money Laundering and Asset Recovery Section (MLARS), the U.S. Attorney’s Office for the Western District of Washington in Seattle and the National Cryptocurrency Enforcement Team (NCET) – should agree “on any action against Binance.” But so far, they can’t get along. It appears that while the NCET and Seattle office are eager to prepare charges, MLARS executives are causing further delays as they want more time to weigh all the evidence gathered against the world’s largest cryptocurrency exchange.
According to Reuters, evidence shows Binance spent the last year processing “over $10 billion in payments for criminals and companies seeking to evade US sanctions” while maintaining “weak anti-money laundering controls” and plotting to evade regulators in the United States. and globally.
Although no charges were filed, Binance apparently devoted resources to persuading the DOJ not to take any action. Over the past few months, sources said Binance attorneys even met with the DOJ to discuss possible plea deals. During these meetings, Binance lawyers also reportedly expressed concern that the charges against the DOJ could now further disrupt the already stalled cryptocurrency market.
Amid Crypto Crash, Binance Continues to Be Influential as the most dominant crypto exchange, positioning itself as the hero crypto needs to reverse the current market downturn. Today, as Reuters published its report, Binance published a blog by Tigran Gambaryan — a former IRS cybercrime special agent who is now the firm’s global head of intelligence and investigations — seemingly ahead of the Reuters report by discussing how Binance is fighting crime cryptographic.
“Crypto is NOT a haven for illicit activity,” Gambaryan wrote on his blog. “I know that’s the truth for Binance, at least.”
The blog does not mention the DOJ investigation, nor the company’s alleged activities involving money laundering or sanctions violations. Instead, Gambaryan reports more generally on Binance’s efforts since November 2021, including responding to “over 47,000 law enforcement requests” and significantly expanding Binance’s security and compliance teams. exchange to cover 300 investigators who are dedicated to protecting users from bad actors.
“We are proud to have some of the most celebrated cyber investigators in our ranks representing virtually every major international law enforcement agency across the globe,” a Binance spokesperson told Reuters.
Binance has been scrutinized by the DOJ for its allegedly secretive policies, founder Zhao allegedly instructing staff to encrypt or delete internal messages, or avoid writing down company information. This, Reuters reported, prevented the DOJ from accessing some records requested by officials and may be partly responsible for MLARS’ reluctance to press charges.
A DOJ spokesperson declined to comment on Ars. Binance did not immediately respond to Ars’ request for comment, but took issue with Reuters’ reports of the company’s activities regarding illicit funds and secret policies. A Binance spokesperson told Reuters, “We have no insight into the inner workings of the US Department of Justice, nor would it be appropriate for us to comment if we do.”
Binance’s Twitter account also tweeted today to challenge Reuters reporting, saying ‘Reuters got it wrong again’.
If the end of the DOJ investigation can ever be reached, Binance and its executives could face indictments, Reuters reported. However, the investigation could also end with a settlement or no action taken.