Will Binance Face Criminal Prosecution for Possible Money Laundering?

Binance and CEO CZ may be in additional danger as authorities discovered irregularities in the cryptocurrency exchange’s compliance program, which is the subject of an ongoing investigation that began in 2018. The news of the inquiry comes as the cryptocurrency market is having a difficult time in the wake of the FTX meltdown.

A Reuter’s report read, “Some of the at least half dozen federal prosecutors involved in the case believe the evidence already gathered justifies moving aggressively against the exchange and filing criminal charges against individual executives including founder Changpeng Zhao.”

According to an earlier Reuters report, Binance was accused of processing a transaction of $8 billion over the course of four years, starting in 2018, by enabling a stream of transactions between itself and the regional Iranian exchange Nobitex. Nobitex allegedly provided instructions on how users may get around US sanctions.

Is Binance a US entity?

The majority of the $8 billion in funding from Iran passed through Binance and according to Chainalysis, the US handled $1.5 million in Iranian transactions, indicating that the exchange might have breached US sanctions.

US sanctions against Iran can be violated with fines of up to $1 million and sentences of up to 20 years in jail for those responsible. Before allowing them to trade on the platform and Binance, the US puts companies through a “rigorous screening process.” US complies with US regulations governing digital exchanges.

A Binance US spokesman argued that the Chainalysis statistic was incorrect. In a blog statement, Binance has also asserted they are not a U.S. corporation and do not have the same obligations with regard to sanctions as U.S. exchanges would have. They have chosen not to reveal who actually owns the exchange or where its headquarters are located.

 Binance’s spokesperson Patrick Hillmann said, “Binance.com is not a U.S. company, unlike other platforms that have exposure to these same U.S. sanctioned entities. However, we have taken proactive steps to limit our exposure to the Iranian marketplace.”