“Binance is requested to produce all documents and materials that are responsive to this letter in its possession, custody, or control,” it said.īinance was launched by Zhao, known as CZ, in Shanghai in 2017 and as of July controlled over half of the world’s crypto trading markets, processing transactions worth more than $2 trillion that month. The letter made 29 separate requests for documents produced since 2017, covering the company’s management, structure, finances, anti-money laundering and sanctions compliance, and business in the United States. A Binance spokeswoman told Bloomberg at the time, “We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion.” The probe’s existence was reported last year by Bloomberg but until now little has been known about it. The request reveals the broad scope of the US investigation into Binance. A Department spokesman declined to comment. He didn’t say how Binance responded to the Justice Department request. This is a standard process for any regulated organization and we work with agencies regularly to address any questions they may have.” Binance has “an industry leading global security and compliance team” with over 500 employees, including former regulators and law enforcement agents, Hillmann added. In response to Reuters’ questions about the letter and investigation, Binance chief communications officer Patrick Hillmann said, “Regulators across the globe are reaching out to every major crypto exchange to better understand our industry. Reuters could not establish how Binance and Zhao, one of the most prominent figures in the crypto sector, responded to the request from the department’s criminal division. The law, designed to protect the US financial system from illicit finance, provides for jail terms of up to 10 years. This requires crypto exchanges to register with the Treasury Department and comply with anti-money laundering requirements if they conduct “substantial” business in the United States. US authorities, the people said, are investigating whether Binance violated the Bank Secrecy Act. The December 2020 request, which has not been previously reported, was part of a Justice Department investigation into Binance’s compliance with US financial crime laws that remains ongoing, four people familiar with the inquiry said. It also sought any company records with instructions that “documents be destroyed, altered, or removed from Binance’s files” or “transferred from the United States.”
The Justice Department’s money laundering section asked Binance to voluntarily hand over messages from Zhao and 12 other executives and partners on matters including the exchange’s detection of illegal transactions and recruitment of US customers. US federal prosecutors asked Binance, the world’s largest cryptocurrency exchange, to provide extensive internal records about its anti-money laundering checks, along with communications involving its chief executive and founder Changpeng Zhao, according to a late-2020 written request seen by Reuters.
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