DOJ To Sue Binance For Money Laundering, Sanctions Violations

Splits between US Department of Justice prosecutors are delaying the conclusion of a long-running criminal investigation into the world's largest cryptocurrency exchange Binance, four people familiar with the matter told Angus Berwick, Dan Levine and Tom Wilson of Reuters.

Photo Insert: Binance recently touted its gold tick on Twitter

The investigation began in 2018 and is focused on Binance's compliance with US anti-money laundering laws and sanctions, these people said.

Some of the at least half dozen federal prosecutors involved in the case believe the evidence already gathered justifies moving aggressively against the exchange and filing criminal charges against individual executives including founder Changpeng Zhao, said two of the sources.

Others have argued taking time to review more evidence, the sources said.

The inquiry involves prosecutors at three Justice Department offices: the Money Laundering and Asset Recovery Section, known as MLARS, the US Attorney's Office for the Western District of Washington in Seattle, and the National Cryptocurrency Enforcement Team.

Justice Department regulations say that money laundering charges against a financial institution must be approved by the MLARS chief. Leaders from the other two offices, along with higher-level DOJ officials, would likely also have to sign off on any action against Binance, three of the sources said.

Through interviews with almost a dozen people familiar with the case, including current and former US law enforcement officials and ex-Binance advisors, along with a review of company records, Reuters has investigated Binance's financial crime compliance over the course of 2022.

It proved that Binance kept weak anti-money laundering controls, processed over $10 billion in payments for criminals and firms seeking to evade US sanctions, and plotted to evade regulators in the US and elsewhere.

The stakes are high for the deeply troubled crypto sector. If the investigation goes against Binance and Zhao, it could loosen Binance's grip on the industry. Its hold has been strengthened by the recent collapse of rival exchange FTX.

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