US DOJ Prosecutors Divided on Money Laundering Case against Binance

UTC by Ibukun Ogundare · 3 min read
US DOJ Prosecutors Divided on Money Laundering Case against Binance
Photo: Web Summit / Flickr

The DOJ investigation showed that CZ had kept the financial records of Binance from the public.

Popular cryptocurrency exchange Binance has denied the alleged probing by the US DOJ over a possible money laundering and criminal sanction violation. The prosecuting office in Seattle began the investigation in 2018 after some criminals used Binance to transfer illicit funds. However, the investigation detail resurfaces after members of the Justice Department reportedly split over the proceeding with the case. While about six members of the federal prosecutors believe the charges are enough to challenge the firm, others believe the DOJ should make more investigations. The ongoing investigations ropes top Binance executives, including the CEO Changpeng Zhao (CZ).

The investigation involves three prosecuting offices: the Money Laundering and Asset Recovery Section, the US Attorney’s Office for the Western District of Washington in Seattle, and the National Cryptocurrency Enforcement Team. Reports indicate that Binance is currently trying to keep the investigation at bay. In a meeting with DOJ officials, Binance’s defense attorney at Gibson Dunn argued that such prosecution would further mar the already stressed crypto market. Interviews with three attendees of the meeting agree that the discussion included potential plea deals.

A Binance spokesperson mentioned:

“As it has been reported widely, regulators are doing a sweeping review of every crypto company against many of the same issues. This nascent industry has grown quickly and Binance has shown its commitment to security and compliance through large investments in our team as well as the tools and technology we use to detect and deter illicit activity…We don’t have any insight into the inner workings of the US Justice Department, nor would it be appropriate for us to comment if we did.”

DOJ Investigations: Binance Claims Compliance with Law Enforcement Agencies

Binance’s Global Head of Intelligence and Investigations, Tigran Gambaryan, has countered assertions that Binance has refused to give replies to law enforcement requests. In a press release, he stated:

“Since November 2021, for example, Binance responded to over 47,000 law enforcement requests with an average response time of three days, which is faster than any traditional financial institution — some of which can take months, by which point the money has gone 2021”

Gambaryan also noted that Binance has increased its security and compliance headcount by more than 500% and participated in over 70 anti-cybercrime workshops with global law enforcement.

The DOJ investigation showed that CZ had kept the financial records of Binance from the public. Earlier this year, he was invited by federal prosecutors to hand over business-related messages regarding illicit transactions that took place in 2020. The Department of Justice also summoned CZ and 12 other Binance executives to submit messages instructing staff to delete documents from Binance’s files.

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