U.S. DOJ reportedly begins another investigation into Binance

Key Insights

• The WSJ claims the US DOJ is investigating Binance again because Iran used it to evade sanctions.
• The latest report follows earlier media reports that Binance enabled sanctions evasion and fired compliance personnel.
• Binance has hit back at reports with a new defamation lawsuit against WSJ.

The US Department of Justice (DOJ) is reportedly investigating the world’s largest crypto exchange, Binance. The investigation is going on for possible use of the platform by the Iranian authorities to evade sanctions.

A new Wall Street Journal report disclosed this, citing undisclosed sources and company documents.

The DOJ is focusing on about $1 billion in cryptocurrencies. These funds moved through the exchange to a network backing militant groups. According to the WSJ report, those groups are supported by Iran.

Multiple Reports Claim Binance Complicit in Sanctions Evasion

The report from WSJ comes amidst recent allegations about the exchange enabling evasion for sanctioned countries, including Iran and Russia.

In an earlier report, the Journal claimed that Binance processed about $1.7 billion in transactions. These transactions were linked to both countries. They also fired a staff member for flagging them.

The DOJ has started interviewing people about $1 billion in transactions. These funds moved from Iran to groups such as the Yemen Houthis. The new report highlights the growing scope of the investigation.

While the WSJ claimed ongoing investigations, it did not specify whether the probe targets Binance itself or its customers.

Fortune, the New York Times, and the WSJ reported the case a few weeks ago. They said Binance sacked an internal investigator. The dismissal followed a probe into Iran-linked transactions.

Reports prompted Senator Richard Blumenthal of Connecticut to act. As the ranking member of the Permanent Subcommittee on Investigations, he opened formal US Senate investigations.

His focus is on Binance and its handling of Iran-linked transactions. Blumenthal claimed that Binance is a repeat offender that is aware of its illicit use but failed to prevent it.

Binance Pushes Back Against Claims of Law Enforcement Investigations

Unsurprisingly, the exchange has pushed back against the reports, describing them as complete fabrications. Its legal team also called the report defamatory in several respects.

In a sign of escalation, the exchange filed a defamation lawsuit against WSJ on March 11. According to the lawsuit, Binance accused WSJ of using clickbait reporting and planning its report with hatred and ill will. Interestingly, the exchange is asking for a jury trial for the lawsuit.

While this is not Binance’s first time suing media houses, its decision to push for a jury trial suggests confidence. The exchange claimed the WSJ ignored its side of the story.

It said the outlet published the report without considering its response. Binance added that the WSJ only offered to correct or update the article afterward.

According to Binance. that it did not dismantle its compliance team but instead removed the sanctioned entities after discovering them. It explained that the sack of a compliance personnel member was for breaching the company’s data protection and confidentiality policy.

Interestingly, the exchange did not sue other media outlets, including Fortune and the New York Times. They had also reported on the incident.

Meanwhile, Binance.US recently named compliance veteran Stephen Gregory as its CEO. Gregory had held a leading compliance role at Gemini and CEX.io and was the US CEO for Currency.com.

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