Records of a US-based investigation from December 2020 have just surfaced. Accordingly, US federal prosecutors have requested comprehensive information on anti-money laundering controls from Binance, the world’s largest cryptocurrency exchange. In addition, prosecutors requested some communication records, including that of Binance CEO and founder Changpeng Zhao.
Prosecutors demand documents related to Binance CEO and 12 officials
In the incident that took place in 2020, prosecutors requested internal correspondence, including from the Binance CEO. These included records containing Binance’s instructions to destroy or hide some important documents. In other words, the scope of the documents requested from the world’s largest cryptocurrency exchange in the investigation was quite wide. According to the leaked details, it remains unknown how Binance and 12 officials responded to these requests. It has seen 29 separate regulatory requests generated since 2017, covering the company’s management, structure, financing, money laundering and sanctions compliance, and operations in the United States.
US questions whether Binance is money laundering
Some officials said that US authorities are investigating whether Binance violated the Bank Secrecy Act. This law requires crypto exchanges to register with the Department of the Treasury. It also requires that they comply with anti-money laundering requirements if they do “significant” business in the United States. The law was designed to protect the US financial system from illegal financing. Accordingly, executives who do not comply with the rules can be tried with a prison sentence of up to 10 years. According to newly emerged documents, US prosecutors are investigating 12 executives, including Binance CEO, in this context.
The requests reveal the broad scope of the US’ Binance investigation. The existence of the investigation was made public by Bloomberg last year. But until now we knew very little about it. A Binance spokesperson told Bloomberg at the time, “We take our legal obligations very seriously. That’s why we work collaboratively with regulators and law enforcement.”
Binance considered the situation normal
The fact that the giant exchange is being investigated in the US for money laundering is nothing new. The Exchange’s Chief Communications Officer, Patrick Hillmann, answered questions about the newly released documents. Hillman said:
“Regulators around the world are reaching out to every major crypto exchange to better understand our industry. This is a standard process for any regulated entity. We already work regularly with agencies to address any questions they may have. Binance has more than 500 employees, including former regulators and law enforcement. So we have an industry-leading global security and compliance team.”
