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 U.S. customers. 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.
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 request reveals the broad scope of the U.S. investigation into Binance. The probe's existence was reported last year by Bloomberg but until now little has been known about it. 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."
A series of Reuters articles this year revealed how Binance drove its explosive growth while keeping weak customer checks and withholding information from regulators. Reuters found that the gaps in Binance's compliance programme enabled criminals to launder at least $2.35 billion in illicit funds through the exchange, which also served traders in Iran despite U.S. sanctions. Until mid-2021, Binance customers could trade crypto by registering with just an email address.
The Justice Department's 2020 letter was addressed to Binance Holdings Ltd., a company in the Cayman Islands, and to Roberto Gonzalez, a Washington-based attorney at law firm Paul, Weiss. Binance Holdings owns the Binance trademark and, according to regulatory filings, is owned by Zhao. Gonzalez and Paul, Weiss did not respond to requests to comment.
In the 2020 request, the Justice Department sought all documents that identified Binance employees responsible for compliance with the Bank Secrecy Act, details of its policies to combat illegal finance, and any reports of suspicious financial activity it had filed to authorities. Binance was asked to provide information on any transactions between the exchange and users involved in ransomware, terrorism and darknet marketplaces, along with those targeted by U.S. sanctions.
Source: Digital Coin News (digitalcoinnews.net)
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