Illegal Activities?: US Investigation of Crypto Exchange Binance: Crypto Investment Firms Reveal Communications | news

• US Attorney’s Office requests for information from crypto investment companies regarding connection to Binance
• Binance has apparently been targeted by authorities since 2018 for possible unlicensed money transfers, money laundering and sanctions violations
• So far no charges against Binance

Since the collapse of the crypto exchange FTX and the subsequent machinations of Sam Bankman-Fried and Co., the call for stricter monitoring and regulation of the crypto market has become stronger again. “Regulators will rightfully scrutinize this industry much, much more closely, which is probably a good thing,” Changpeng Zhao himself, founder and CEO of the world’s largest crypto exchange Binance, said in November 2022, according to The Washington Post. Binance itself is also targeted – by the US Attorney’s Office. According to Reuters, there have been investigations into the crypto exchange since 2018. Now, as part of the federal probe, several US investment firms have apparently been asked to hand over records of their communications with Binance.


Trade Binance Coin and other cryptos with leverage via CFD (long and short)

Binance Coin and other cryptocurrencies have recently corrected significantly. Trade cryptos like Bitcoin or Ethereum with leverage on Plus500 and participate in rising and falling prices.

Plus500: Please note the information5 to this ad.

Binance closes loopholes for illegal activities

According to The Washington Post, US hedge funds that do business with the crypto exchange Binance have received subpoenas in the past few months. These are part of a long-running investigation into Binance for possible violations of anti-money laundering rules. As reported by Reuters, US prosecutors had already requested extensive internal records of Binance’s anti-money laundering controls and discussions involving Zhao and other Binance executives in 2020. The investigations, which the news agency said also focus on possible unauthorized money transfers and violations of criminal sanctions , was said to have started two years earlier, i.e. shortly after Binance was founded in 2017. Back then it should have been possible. only registering with the crypto exchange with an email address, which enables anonymous transactions and makes money laundering easy. Regulators in the US and elsewhere are said to have been deliberately circumvented, according to Reuters. “Binance didn’t have a reputation for being a responsible exchange,” John Ghose, a former US Justice Department official, told The Washington Post.

Binance itself now admits that there were regulatory deficits in the company’s early days. However, that has changed now. The crypto exchange communicates daily with “virtually every regulatory body around the world,” Binance chief strategy officer Patrick Hillmann told The Washington Post. “In the last two years, the company has completely changed its attitude,” continued Hillmann. “Now that we have these resources, we are certainly one of the most proactive parties in identifying, freezing and recovering laundered funds.”

Also according to Cointelegraph, Binance has joined the Chamber of Digital Commerce, a lobby group that wants to influence future regulations for the crypto sector, and has joined the Association of Certified Sanctions Specialists (ACSS). This was established, according to information on its website, “to promote sanctions compliance by supporting the professional development of the individuals who lead these efforts.” Nevertheless, according to “Reuters”, Binance is said to have processed Iranian transactions worth around one billion US dollars between August 2021 and November 2022 – despite existing US sanctions aimed at cutting off Iran from the global financial system.

Corporate structure of crypto exchange makes work difficult for US authorities

But according to The Washington Post, one of the biggest challenges for investigators is proving that Binance is even subject to US law. For example, Binance Holding Ltd., a shell company that operates several Binance subsidiaries, is based in the Caymans. The company’s primary offshore exchange,, does not operate in the United States. “ is not an American company,” Binance Chief Strategy Officer Hillman said, according to Reuters. Therefore, the company does not believe that it should be registered with the Ministry of Finance. But it is a basic requirement for compliance with the Bank Secrecy Act, according to The Washington Post.

In fact, US users can only access Binance.US – a separate exchange operated by a US company and registered with the Treasury Department as a money services company since 2019, according to Reuters. According to Binance CEO Zhao, Binance.US is a “completely separate entity” that operates independently of Binance.US customers only have limited investment options compared to the main exchange For example, it is not possible to trade crypto derivatives at Binance.US. However, the news outlet suggests that the US crypto exchange was created only to distract the attention of regulators from the main platform. Changpeng Zhao is said to have been concerned that US authorities could access Binance’s internal records.

However, the current requests for information from the prosecutor’s office to US crypto hedge funds may be related to possible unauthorized trading on the offshore exchange Because while several major U.S. crypto hedge funds told The Washington Post they would only use the Binance.US trading platform or generally prefer the publicly traded crypto trading platform Coinbase, the CEO of a New York investment firm told the paper that his firm would trade on Binance’s offshore exchange through non-US entities. Although this is prohibited for US citizens, businesses and citizens are very different, according to the hedge fund manager.

Accusations against Binance could deal a new blow to the crypto world

So far, the US Attorney’s Office is only investigating. No charges have yet been filed against Binance — or any of the crypto hedge funds. According to The Washington Post, the current subpoenas also do not mean that an indictment is imminent. According to information from “Reuters”, the prosecutor’s office is currently discussing how to proceed and whether to seek a comparison or whether there is sufficient evidence for an indictment against the crypto exchange. According to the news agency, however, some of the federal prosecutors involved believe the evidence already collected would justify taking aggressive action against Binance and even filing criminal charges against founder Changpeng Zhao and other executives. Should an indictment actually come, due to Binance’s dominant role in the sector, it could lead to another earthquake in the crypto market, which is currently experiencing great uncertainty anyway.


Image Credits: Iryna Budanova /

Leave a Comment