Binance allows Russians to dodge US sanctions, says DoJ
Binance, the world’s largest crypto ecosystem, is facing a new probe by the US authorities over its possible involvement in allowing Russians to evade US sanctions through its platform.
The US Department of Justice’s national security division is investigating whether Binance or its executives violated US sanctions related to Russia’s annexation of Crimea and interference in Ukraine, Bloomberg reported, citing five anonymous sources. This probe is separate from an ongoing inquiry by the DOJ’s criminal division into Binance’s compliance with anti-money laundering and tax laws.
The move comes shortly after Binance reportedly eased restrictions on Russian citizens and residents that it had imposed over a year ago, breaking ranks with mainstream finance and global regulators in a decision that weakens Western attempts to isolate Moscow.
Complying with the latest EU sanctions targeting Russia, Binance started to restrict or terminate services for Russian accounts back in Mach 2022. The move followed the adoption of new European penalties in response to Russia’s military escalation in Ukraine.
Based on the report from ForkLog, the influential crypto ecosystem now accepts deposits in Russian rubles, euros, British pounds, and other currencies using bank cards issued in Russia. However, there has been no official statement from Binance on the matter.
The development comes barely a month after world’s largest crypto exchange told users that Russian nationals and people living in the country, as well as companies based there, are not allowed to trade on its P2P marketplace using US dollar or euro. EU-based traders were also prohibited to transact in Russian rubles.
Accounts for Russia-linked users that have completed address checks and hold crypto worth less than 10,000 euros can choose other available fiat currencies.
Since the start of Russia’s invasion of Ukraine, Binance blocked the accounts of Russian individuals who have been sanctioned, but it did not unilaterally freeze the accounts of all Russian users.
Most crypto exchanges, including Binance, initially rejected calls for a blanket ban on all Russian users to stop their platforms from being used as a way round Western sanctions. Ultimately, however, they had to comply with sanctions that forbid Russian individuals and companies from the use of cryptocurrencies.
As a result, the world’s largest crypto exchange blocked Russian nationals or residents from making new deposits or trading if they hold over 10,000 euros. Affected clients were given 90 days to close their positions and withdraw funds.
Binance has been under increasing scrutiny from regulators around the world, who have expressed concerns about the lack of oversight and transparency in the crypto industry. In March, the US Commodity Futures Trading Commission (CFTC) accused Binance of operating illegally in the US and offering derivatives to US customers without registration. Binance has denied any wrongdoing and said that it does not offer any products or services to US residents.
The DOJ’s probe into Binance’s possible role in facilitating Russian sanctions evasion comes amid rising tensions between Washington and Moscow. The US has imposed several rounds of sanctions targeting individuals, entities, and sectors linked to the Kremlin’s aggression in Ukraine and elsewhere.
