DOJ investigates Binance for violating Russian sanctions

Bloomberg reported on May 5 that the United States Justice Department’s (DOJ) national security division is investigating Binance for allowing Russians to use the cryptocurrency exchange in violation of U.S. sanctions.

No allegations have been made against the company or its executives about the investigation.

The national security investigation is being conducted concurrently with a criminal division investigation, according to five unnamed sources cited by the news service.

In the United States, Binance is the subject of multiple investigations, including a Department of Justice investigation into Anti-Money Laundering violations.

After Russia was sanctioned in April 2022, Binance restricted its services to the country.

According to a company executive, it continued to operate in Ukraine, barring only areas that were no longer under government control and serving only non-sanctioned individuals.

In a March lawsuit filed by the U.S. Commodity and Futures Trading Commission, Binance was additionally accused of Know Your Customer/Anti-Money Laundering (KYC/AML) violations.

The company did not immediately respond to an inquiry, but it told Bloomberg in a statement that it complies with U.S. and international sanctions and that its Know Your Customer (KYC) protocols are comparable to those of traditional banking. Furthermore:

“Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money.”

It was stated that every customer is subject to identity and residency verification.

Moreover, Bloomberg reports that Binance “has been in discussions” with the DOJ regarding allegations that it violated an earlier iteration of sanctions against Iran.

Binance is not the only cryptocurrency exchange under scrutiny for sanctions violations.

According to a May 1 announcement, Poloniex paid a $7.6 million settlement to the U.S. Treasury Department’s Office of Foreign Asset Control for violating sanctions against Crimea, Cuba, Iran, Sudan, and Syria.