Will Binance face a money laundering lawsuit?

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Binance and its CEO “CZ” may be in jeopardy as authorities uncovered irregularities in the cryptocurrency exchange’s compliance program, which is the subject of an ongoing investigation that began in 2018. News of the investigation comes as the cryptocurrency exchange Cryptocurrency is going through a difficult time in the aftermath of the FTX collapse.

A Reuters report said:

“Some of the at least half a dozen federal prosecutors involved in the case believe that the evidence already gathered justifies acting aggressively against the exchange and bringing criminal charges against individual executives, including founder Changpeng Zhao.”

According to an earlier Reuters report, Binance was accused of processing an $8 billion transaction over the course of four years, starting in 2018, by allowing a flow of transactions between itself and the Iranian regional exchange Nobitex. Nobitex allegedly provided instructions on how users can circumvent US sanctions.

Is Binance a US entity?

Most of the $8 billion in funds from Iran passed through Binance, and according to Chainalysis, the US handled $1.5 million in Iranian transactions, indicating that the exchange may have violated US sanctions.

US sanctions against Iran can be violated with fines of up to $1 million and sentences of up to 20 years in jail for those responsible. Before allowing them to trade on the platform and on Binance, the US puts companies through a “rigorous screening process”. The US complies with US regulations governing digital exchanges.

A Binance US spokesperson argued that the Chainalysis statistic was incorrect. In a blog statement, Binance also claimed that they are not a US corporation and do not have the same obligations regarding sanctions that US exchanges would. They have chosen not to reveal who the actual owner of the exchange is or where its headquarters are located.

Binance spokesperson Patrick Hillmann said:

“Binance.com is not a US company, unlike other platforms that are exposed to these same US sanctioned entities. However, we have taken proactive steps to limit our exposure to the Iranian market.”

The post Will Binance face a lawsuit for money laundering? It was first published on Criptoinforme.

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