Binance is under investigation for possible violations of the Bank Secrecy Act

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(Kitco News) – Binance, the world’s largest and most active cryptocurrency exchange, is under investigation for possible violations of the Bank Secrecy Act, according to a report released Thursday by Reuters.


The investigation emerged after it was revealed that in December 2020, US federal prosecutors asked Binance to provide internal documents relating to anti-money laundering controls, as well as all communications involving Binance founder and CEO Changpeng Zhao (CZ).


The Money Laundering Division of the Justice Department has also called for the voluntary release of messages from 12 other executives and partners covering various topics, including the exchange’s detection of illegal transactions and the recruitment of US customers.


All corporate records were also requested with instructions that “documents must be destroyed, altered or removed from Binance files” or “transferred from the United States”.


This is the first time the DOJ’s request has been publicly disclosed in depth, and sources familiar with the matter say Binance’s investigation into compliance with U.S. financial crime laws is still ongoing.


The main objective is to determine whether Binance has violated the Bank Secrecy Act, which “requires cryptocurrency exchanges to register with the Treasury Department and comply with anti-money laundering requirements if they engage in” substantial “business in the United States,” according to Reuters.


Twenty-nine separate requests were included in the original letter, requesting documents dating back to 2017 on matters ranging from company management, facility, finances, anti-money laundering, and US sanctions and business compliance.


“Binance is required to produce all documents and materials that respond to this letter in its possession, custody or control,” the letter reads.


It is currently unknown how Binance and CZ responded to the request.




When asked about the investigation, Binance Chief Communications Officer Patrick Hillmann said, “Regulators around the world are reaching out to all major cryptocurrency exchanges to better understand our industry. This is a standard process for any regulated organization and we regularly collaborate with agencies to answer any questions they may have ”.


Hillmann added that Binance has an “industry-leading global security and compliance team” of over 500 employees, including former regulators and law enforcement.


This latest revelation follows Tuesday’s announcement that the House Oversight and Reform Commission has sent letters to five cryptocurrency exchanges and four government agencies requesting information and documents on what measures are being taken, if any, to safeguard. consumers from scams and instances of cryptocurrency fraud.


Binance.US was included in the recipient list, along with Coinbase, FTX, Kraken, and KuCoin. The committee requested documents dating back to January 1, 2009, detailing their efforts to combat scams and crypto fraud.




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