Suspected of alleged money laundering, tax evasion, and US sanctions violations, Binance has been under investigation by the US Department of Justice since 2018 but has never been formally accused of any wrongdoing. Now, Reuters reports that some federal prosecutors feel they’ve amassed enough evidence to file criminal charges against Binance—including individual charges against Binance founder Changpeng Zhao—but other DOJ officials are standing in the way.
Reuters reviewed Binance records and spoke to nearly a dozen sources to compile a “comprehensive” progress report detailing DOJ’s inquiry so far. Sources included former Binance advisers, as well as current and former US law enforcement officials. These sources told Reuters that prosecutors spread across three DOJ offices—the Money Laundering and Asset Recovery Section (MLARS), the US Attorney's Office for the Western District of Washington in Seattle, and the National Cryptocurrency Enforcement Team (NCET)—would have to agree “on any action against Binance.” But for now, they can't agree. It seems that while NCET and the Seattle office are eager to prepare charges, MLARS leadership is causing further delay because they want more time to weigh all the evidence gathered against the world’s largest cryptocurrency exchange.
According to Reuters, evidence shows that Binance allegedly spent the past year processing “over $10 billion in payments for criminals and companies seeking to evade US sanctions,” while keeping “weak anti-money laundering controls” and plotting to evade regulators both in the US and globally.
While no charges have been filed, Binance has seemingly devoted resources to persuading DOJ against taking any actions. In the past few months, sources said that Binance lawyers have even met with DOJ to discuss potential plea deals. During those meetings, Binance lawyers reportedly also expressed concerns that the DOJ filing charges now could further disrupt the already crashing cryptocurrency market.
Amid the crypto crash, Binance continues to be influential as the most dominant crypto exchange platform, positioning itself as the hero crypto needs to reverse the current market downturn. Today, as Reuters published its report, Binance published a blog from Tigran Gambaryan—a former IRS cybercrimes special agent who’s now the company’s global head of intelligence and investigations—seemingly getting ahead of the Reuters report by discussing how Binance fights against crypto crime.
“Crypto is NOT a safe haven for illicit activities,” Gambaryan wrote in his blog. “I know this is the truth for Binance, at least.”
The blog doesn’t mention DOJ’s investigation, or the company’s alleged activity involving money laundering or sanctions violations. Instead, Gambaryan reports more generally on Binance efforts taken since November 2021, including responding to “more than 47,000 law enforcement requests” and drastically expanding the exchange’s security and compliance teams to span 300 investigators that are dedicated to protecting users from bad actors.
"We are proud to have in our ranks some of the most celebrated cyber investigators representing virtually every single major international law enforcement agency across the globe,” a Binance spokesperson told Reuters.
Binance has been scrutinized by DOJ for its supposedly secretive policies, with founder Zhao allegedly instructing staff to encrypt or delete internal messages, or else avoid putting any company information into writing. This, Reuters reported, has obstructed DOJ from accessing some records officials have requested and could be partly responsible for MLARS' hesitancy to file charges.
A DOJ spokesperson declined to comment to Ars. Binance did not immediately respond to Ars’ request for comment but has disputed Reuters’ reporting on company activity regarding illicit funds and secretive policies. A Binance spokesperson told Reuters, "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."
The Binance Twitter account also tweeted today to dispute Reuters' reporting, claiming, “Reuters has it wrong again.”
If an end to DOJ's inquiry can ever be reached, Binance and its executives could face indictments, Reuters reported. However, the inquiry could also end in a settlement or no actions taken whatsoever.
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