Possible Violation of Anti-Russian Sanctions: US Department of Justice Investigates Binance

The US Department of Justice (DoJ) has launched an investigation into Binance cryptocurrency exchange over possible breaches of anti-Russian sanctions, The Wall Street Journal writes about this, citing informed sources.

The use of Binance by Russians to withdraw funds has raised concerns about the crypto exchange’s standing in the United States. The issues might further escalate, as revealed by an insider familiar with the inquiry.

Using Binance to circumvent sanctions

In the month of July, Binance facilitated transactions involving the conversion of the ruble to cryptocurrency, totaling a substantial $8 billion. This data is based on information from CCData, as reported by The Wall Street Journal.

Most of these transactions were linked to the Tether cryptocurrency, a significant point highlighted by the publication. Tether, recognized as the first stablecoin, maintains its value by being tied to a conventional currency or tangible asset. Although the ruble trading volumes on Binance had experienced a decline from their peak levels in early 2022, they have begun to recover in recent months, according to CCData.

In May, Bloomberg wrote about such an investigation, citing sources. Then the agency reported that other investigations were being conducted in parallel with respect to the crypto-exchange, in particular, those related to the circumvention of sanctions against Iran. The US Department of Justice declined to comment, writes WSJ.

A Binance spokesperson said that the exchange complies with international sanctions and applies restrictions to people, organizations and countries that are included in the sanctions lists. According to him, Binance denies all of them access to its platform.

The Binance P2P service is not associated with any banks in Russia or elsewhere, the exchange does not cooperate with partners that have fallen under sanctions, a representative of the exchange told MarketsXplora.

Read also: How Binance Is Trying to Outwit EU Regulators and Break into the UK Market

Binance P2P service and collaborations with sanctioned banks

As per details found on the Binance P2P service website, the platform extends its payment services to Russian users, collaborating with a minimum of five banks subject to sanctions, as highlighted by the Wall Street Journal (WSJ).

Towards the close of July, the WSJ reports that a considerable number of traders, numbering in the hundreds, took advantage of Rosbank as their chosen channel for transactions involving the exchange of Tether for rubles, reaching a total value nearing the $1 million mark.

Notably, Russian users engaged in conversations within Binance’s official Telegram chat, sharing their recent experiences of conducting transactions through both Rosbank and Tinkoff Bank. Despite this, neither of these banks responded to WSJ request for comments.

Read also: Bitcoin Conversion into Rubles is Money Laundering in Russia

In March of 2023, Binance took the decision to halt the facilitation of dollar and euro transactions for Russian customers via the P2P service.

During this time, the exchange clarified that users were still able to select from a range of other fiat currencies. This decision was prompted by the implementation of the European Union’s tenth set of sanctions against Russia.

A representative from Binance emphasized in a statement to the WSJ that the exchange is fully committed to adhering to all pertinent regulations within the European Union.