After the FTX contagion, Binance may have issues. According to recent allegations, the crypto exchange compliance programme has irregularities.
Binance may face charges over its 2018 US money laundering investigation.
Launched in the US in 2018, the cryptocurrency exchange Binance may be subject to penalties.
Top exchange Binance may run into problems as the crypto market continues to struggle following the FTX-related contagion impact. The compliance programme for the crypto exchange reportedly contained abnormalities, according to the most recent reports. The information was discovered as a result of the criminal investigation by the US Justice Department, which started in 2018. On whether to wrap up the investigation, the US Department of Justice's prosecutors are apparently split.
According to recent reports, Iran-based businesses used Binance to transact cryptocurrency worth $1 billion. This might have put the cryptocurrency exchange in violation of American sanctions. According to a recent Reuters article, a disagreement among the prosecutors is holding up the case's resolution. According to the report, the inquiry is primarily focused on American anti-money laundering legislation and sanctions.
It's interesting to note that the investigation team already has a sufficient amount of proof to support criminal charges against a number of officials, including CEO CZ. On the other hand, the report stated that some prosecutors support a review of the accumulated evidence. Law enforcement agents have questioned a number of former Binance advisors as part of the investigation. Additionally, defence lawyers for Binance have spoken with Department of Justice representatives.
A US revenue department unit that was actively looking into Binance has hired staff for the cryptocurrency exchange, according to the Reuters article. Along with this, the organisation has a stringent policy against using unsecured email and chat systems for internal communication.
Three allegations against the cryptocurrency exchange are being investigated: unlicensed money transfer, a plot to launder money, and violations of criminal penalties. The announcement of the criminal inquiry comes as the cryptocurrency market is having a difficult time in the wake of the FTX meltdown. In reality, among the biggest crypto corporations, Binance is one of the few businesses that did not suffer significant losses as a result of the FTX meltdown.
Following the emergence of the FTX liquidity crunch in November 2022, CZ started the proposal to reveal corporate reserves in order to ensure complete openness among crypto enterprises. The merkle-tree proof of reserves mechanism is what CZ advised cryptocurrency exchanges to use in order to adhere to the idea of complete transparency.
Read Also: Bitcoin Proof Of Reserves Audit Report for Binance is now available.
