According to a late-2020 written request seen by Reuters, U.S. federal prosecutors asked Binance, the largest cryptocurrency exchange in the world, to provide extensive internal records about its anti-money laundering checks and communications involving its chief executive and founder Changpeng Zhao.
Binance was ordered to voluntarily provide messages from its CEO, Changpeng Zhao, and 12 other officials and partners to the Justice Department’s money laundering division on topics like the exchange’s identification of illicit transactions and the solicitation of U.S. clients.
The U.S. government was also looking for records that contained messages regarding “documents be destroyed, altered, or removed from Binance’s files” or “transferred from the United States.”
Four people with knowledge of the probe said the Justice Department’s continuing investigation of Binance’s compliance with U.S. financial crime laws included the December 2020 request, which had not previously been publicized.
U.S. Government’s Investigation
Allegedly, US officials are looking into whether Binance broke the Bank Secrecy Act.
If crypto exchanges perform significant business in the United States, they must register with the Treasury Department and adhere to anti-money laundering regulations.
The statute, which is intended to safeguard the American financial system from criminal financing, allows for 10-year prison terms.
The report was unable to determine how Binance and Zhao, two of the most well-known individuals in the cryptocurrency industry, replied to the department’s criminal division’s request.
Binance Chief Communications Officer Patrick Hillmann responded to Reuters’ inquiries over the letter and investigation with the following statement:
“Regulators across the globe are reaching out to every major crypto exchange to better understand our industry. This is a standard process for any regulated organization and we work with agencies regularly to address any questions they may have.
[Binance is] an industry-leading global security and compliance team”
The Importance of Binance
The largest cryptocurrency exchange by market capitalization was founded in Shanghai in 2017 by Zhao, also known as CZ;
As of July of 2022, Binance controls more than half of the global cryptocurrency trading markets, completing trades worth more than $2 trillion in a single month.
Zhao, who was born in China and had his education in Canada, where he also holds citizenship, stated to Bloomberg in March that he will be based in Dubai for the “foreseeable future.” That same month, Dubai gave Binance permission to carry out some operations.