Binance CEO under investigation

 The US Department of Justice targets billionaire Changpeng Zhao (CZ), the founder of the world's largest cryptocurrency exchange Binance, in an anti-money laundering investigation.

On September 1, Reuters reported that federal prosecutors had asked Binance to voluntarily hand over messages from CZ and 12 executives and other partners related to transactions and user development. in America.

The Justice Department filing also mentions the company's instructions to "destroy documents, change or delete information from the Binance system". Content "shipped from the US" by Binance was also targeted by the authorities.

Binance CEO Changpeng Zhao during the Viva Technology conference in France on June 16, 2022. Photo: Reuters
Binance CEO Changpeng Zhao at the Viva Technology conference in France on June 16. Photo: Reuters

Sources said the investigation began in December 2020 and is still ongoing. The two main issues considered are whether Binance complies with US anti-financial crime laws and whether its operations violate the Bank Secrecy Act.

Binance is also required to provide information about any transactions between the exchange and users involving ransomware, terrorism and darknet markets, and targeted US sanctions.

Cryptocurrency exchanges must register with the US Treasury Department and comply with anti-money laundering regulations if conducting substantial business in the US. This law is designed to protect the US financial system from illicit financing, violators of which can be punishable by up to 10 years in prison.

Neither CZ nor well-known figures in the crypto space have yet to give an official response to the news. Meanwhile, Binance Chief Communications Officer Patrick Hillmann said: "Regulators globally are contacting every major crypto exchange to get a better understanding of the industry. This is a standard process for all major crypto exchanges. any regulated organization and we regularly work with the authorities to resolve any questions they may have".

Binance says it has a security team of more than 500 employees and always adheres to industry-leading security regulations. However, Hillmann did not comment on the US Department of Justice's request against CZ, the CEO of Binance.

In a document obtained by Bloomberg, a Binance spokesperson said: “We take legal action and cooperation with law enforcement very seriously.”

Binance was founded by billionaire Changpeng Zhao in Shanghai 2017. As of July, Binance accounted for more than half of the global cryptocurrency trading volume, processing an average of over 2 million worth of transactions each month. trillion USD.

According to Reuters, a Binace vulnerability allowed criminals to launder $2.35 billion of illegal money through the exchange. Until mid-2021, despite US sanctions, Iranian users will still be able to trade cryptocurrencies simply by registering with an email address.

However, Binance refuted the Reuters findings, calling them

"outdated". The exchange says it is promoting higher standards in the industry to improve detection of illegal cryptocurrency trading activities.

Electronic currency exchanges are being supervised in the US. In February, the Department of Justice established a national cryptocurrency enforcement team to address the growing problem of crime related to these technologies.

This month, the BitMEX exchange co-founder pleaded guilty to violating the Bank Secrecy Act and was subsequently sentenced to 2.5 years. BitMEX also agreed to pay a fine of US $ 100 million to settle separate fees for violations.

Meanwhile, from last year, more than 10 financial management agencies around the world issued a warning about Binance. The accused platform is serving users without a license or violations of money laundering rules. In July, the Central Bank of the Netherlands fined Binance more than 3 million euros for violating the Financial Crime Law. At the time, a spokesperson for Binance said the fine marked a "turning point in our continued cooperation" with the central bank.
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