Binance, under investigation in the US, risks very heavy charges

Published 13 Dec 2022 at 12:52 p.mUpdated 13 Dec. 2022 at 12:57 p.m

US courts are set to indict Binance officials, including its chief Changpeng Zhao, according to information published by Reuters on Monday. The news agency reports that three entities have been investigating the largest cryptocurrency exchange since 2018, and that some investigators believe they have gathered enough material to initiate potential lawsuits. Others, however, will wait until they have gathered more evidence.

The charges that Binance may face include: transferring money without a license, money laundering in concert, and violating criminal sanctions. Those responsible were nonetheless able to negotiate a compromise to avoid a lawsuit. A representative of Binance has already had an interview with the US Department of Justice to discuss this possibility, still according to Reuters.

An easy know-your-customer procedure

According to the news agency, $10 billion in payments from criminals, people trying to evade US sanctions or the regulator were made through Binance. These operations would have been made possible by an easy know-your-customer procedure, because until August 2021 it was possible to open an account on the platform with a simple email address. However, the introduction of stricter controls would not have put an end to the problematic transactions: “Between then and last November, Binance traded $1 billion for Iranian crypto firms, putting the company at risk of violating US sanctions”write the journalists.

The exchange platform was established in 2017 in Shanghai (China), but no longer indicates an international headquarters. The US authorities’ investigation was therefore launched shortly after Binance’s birth. The key crypto-asset player immediately published a press release to highlight its control and compliance teams. “Since November 2021, for example, Binance has responded to over 47,000 requests from regulators with an average response time of three days, which is faster than any traditional financial institution.” The platform’s token, BNB, fell this morning to around $256 before rising to $268 as of this article’s publication, but still down 2.5% on the day.

The platform was also affected by transaction difficulties today. In a tweetit indicated that USDC stablecoin withdrawals were suspended. The rationale given by Changpeng Zhao to be large volumes of exchanges with other crypto and this token, which the conversion requires to pass through a bank in New York, which would currently be closed.;

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