By
Steve Muchoki
April 22nd, 2024
Binance was mandated to submit extensive internal records of its dealings and how it complied with anti-money laundering (AML) rules in the US.
New reports have surfaced, revealing that US federal prosecutors requested the phone records of Binance CEO Chanpeng Zhao (CZ) in 2020. According to Reuters, this was when the United States Department of Justice (DoJ) was investigating world-leading crypto exchange Binance and CZ amid allegations of money laundering and other illegal activities.
Binance and Top Executives Are Under Prosecution’s Microscope
Per the request, the exchange was mandated to submit extensive internal records of its dealings and how it complied with anti-money laundering (AML) rules. That is, how the exchange was able to detect illegal transactions and truly verify user profiles in that period.
Prosecutors also asked for the records of all forms of communication between the exchange and CZ during the time. However, those would include emails, texts, and even call records.
Reportedly, the 2020 request also specifically targeted any messages which contained some instructional keywords. They include statements like; “documents be destroyed,” documents be removed from Binance’s files,” or “transferred from the United States.” Interestingly, however, the scrutiny extended beyond CZ alone. At least, 12 other top executives at the exchange were also involved in the investigations.
It is worth mentioning that investigations are still ongoing. This is even as the DoJ continues to determine whether or not Binance complied with US financial crime laws.
Anti-Money Laundering Violations Could Lead to Jail Sentences
Meanwhile, there may be reasons to believe that Binance possibly went against the Bank Secrecy Act as Reuters also claim.
As the act stipulates, crypto exchanges that would do business in the U.S. must first register with the Treasury. The same exchange must also comply with already set anti-money laundering regulations. However, failure to abide by the said act may result in jail sentences for the violators.
Despite this possibility, Binance has severally denied any wrongdoing. In fact, the exchange has on numerous occasions, reiterated its readiness to work cooperatively with global regulators. This is even as the regulators also strive to better understand the industry.
Notably, Binance boasts of a security and regulatory compliance team of over 500 workers globally.