• Binance is under investigation by the US Justice Department.
• The inquiry is for potential sanctions violations related to Russia’s invasion of Ukraine.
• A former senior SEC official asked Binance users to exit the exchange.

The biggest crypto exchange, Binance Holdings Ltd., is under investigation by the U.S. Justice Department’s (DOJ) national security division for potential violations of U.S. sanctions related to Russia’s invasion of Ukraine.

This development was captured in a Bloomberg report. It noted that the DOJ wants to confirm whether Binance or the company’s official was used illegally to let Russians skirt US sanctions and move money through the exchange.

However, Binance claims to comply with all US and international financial sanctions in a statement. While arguing that its know-your-customer standards rival the traditional banking system, Binance maintains that it has zero tolerance for obscure sources of money.

The statement from Binance read:

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

Interestingly, the inquiry into Binance has sparked another round of fear, uncertainty, and doubt (FUD) in the crypto industry. A former senior Securities and Exchange Commission (SEC) official recently asked Binance users to exit the exchange. 

Binance’s future is in jeopardy, at least that’s my opinion. Having worked as a lawyer in the SEC Enforcement Division for 18 years, I was trained to spot red flags. When I read about Binance, I see a lot of red flags.

Lack of Reliable, Trustworthy Information

Just consider… pic.twitter.com/hXFahhwZuo

— John Reed Stark (@JohnReedStark) May 2, 2023

Notably, the recent investigation runs parallel to an existing criminal division inquiry, adding a new layer of scrutiny to Binance. Previously, Binance has been in talks with the Justice Department to resolve complaints that the exchange was used to evade sanctions against Iran. 

Furthermore, the investigation is part of a broader crackdown by the US government on crypto exchanges, which are sometimes used to launder money and commit other finance criminal activity. In recent months, the DOJ has charged several crypto exchanges with violating sanctions and money laundering laws.

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