In a letter to Binance, US Federal prosecutors have asked the cryptocurrency exchange to hand over its internal documents and communications involving its CEO as part of its money laundering investigation.
U.S. attorneys have asked cryptocurrency exchange Binance to release internal records and communications from its CEO Changpeng Zhao regarding its money laundering investigation, Reuters reported.
The Justice Department asked the exchange to relay communications between Zhao and other executives about “illicit transactions” and solicitation of customers in the United States.
Four people familiar with the investigation said the Department’s investigation into Binance’s compliance with U.S. financial crime laws included the December 2020 request, which had not previously been published. According to the people, US officials are investigating whether Binance has violated the Bank Secrecy Act.
If crypto exchanges do “substantial” business in the United States, they must register with the Treasury Department and comply with anti-money laundering regulations. The law, which aims to protect the US financial system from criminal financing, provides for a ten-year prison sentence
The ministry’s letter to Binance included 29 separate requests for records related to management, organizational structure, financial condition, anti-money laundering and sanctions compliance, and US operations since 2017.” Binance is requested to produce all documents and materials in response to this letter that are in its possession, custody or control,” it said.
The request demonstrates the extensive nature of Binance’s US investigation. Bloomberg, which reported on the investigation last year, quoted a Binance representative at the time: “We take our legal obligations very seriously and are cooperating with government and law enforcement.”
US Investigation
The Department of Justice has cracked down on the unregulated cryptocurrency market this year after people lost huge sums of money after the market crashed. The government is primarily involved in money laundering in the cryptocurrency space. Cybercriminals have been observed using cryptocurrencies to launder hackers’ money and circumvent laws.
Authorities cracked down on cryptocurrency mixers by sanctioning specific wallet addresses. Criminals have been seen using cryptocurrency exchanges and mixers to avoid government radars.
In a blog post, CEO Zhao wrote, “We don’t have any legal entity in China,” even though Binance started its business in the country. “The biggest challenge for Binance today is that we (and all other offshore exchanges) have been identified as criminal entities in China,” he added.
Since last year, financial regulators in many countries have warned Binance that it is either serving unlicensed users or violating anti-money laundering standards.
The Dutch central bank fined Binance over €3 million in July for violating the country’s finance laws. A Binance spokeswoman at the time claimed the fine was a “pivotal part of our ongoing collaboration” with the central bank.
Source link
