“As has been well documented, regulators around the world are reaching out to every major crypto exchange to better understand our industry. We regularly work with agencies to address open questions,” a Binance spokesperson said in an emailed statement. -mail.
“Binance has a leading global security and compliance team with more than 500 employees worldwide. Our team includes professionals from regulatory backgrounds, senior researchers from renowned blockchain analytics firms, and law enforcement officers who have led some of the largest investigations in cybercrime .”
The DoJ did not respond to a request for comment.
CZ, a Canadian citizen, appears to confirm the investigation on his Twitter account.
“Another story today about a crypto company receiving a request from a regulator,” the billionaire posted on Sept. 1. “A request to VOLUNTARILY share certain information in 2020, which we did. Important for the industry to build trust with regulators.”
He added that his chat messages are “semi-public anyway”.
In another message posted a little later, Zhao insisted on transparency.
“Stay up front, stay transparent,” he said.
The crypto billionaire has garnered support from social networks who are especially happy about the fact that he never flinched when talking about Binance for good or bad.
“Just facts 💪💪 #Binance #BNB,” commented one Twitter user.
“Binance comes before the bad actors in the crypto space,” added another user.
Binance resists accusations
CZ has built a reputation as an open boss in the industry. He regularly engages crypto fans and critics on social media and is very vocal in pushing the industry to be more transparent.
The DoJ investigation is part of the Bank Secrecy Act, which aims to protect the US financial system from unlawful interference. Companies subject to a Bank Secrecy Act must be registered with the US Treasury’s Financial Crimes Enforcement Network.
Last June, Reuters reported that Binance processed $2.35 billion in transactions that resulted from investment fraud, hacks and illegal drug sales. The transactions would have taken place between 2017 and 2021, before the platform took measures to combat money laundering.
The news channel pointed to the hacking of Eterbase, with some of the proceeds being laundered through Binance by the North Korean hacker group Lazarus, and Binance’s association with the Russian-language drug market Hydra.
Binance refutes that only a very small percentage of crypto transactions involve illegal activity. It references a report from blockchain analytics firm Chainalysis, according to which of all transactions made with cryptocurrencies in 2021, 0.15% were associated with some form of illegal activity.
“Crypto is incredibly transparent, infinitely more than traditional money economy, and this is well documented. So you’re telling us where the real problem is with money laundering?” Binance wrote a response to the investigation in a blog post.
The Securities and Exchange Commission is also investigating Binance. The federal agency is trying to determine whether Binance Holdings violated securities-related rules when the company launched its own BNB token five years ago as part of an initial coin offering (ICO).