Gross, who left Binance last year, did not respond to messages and phone calls. law firm Paul Weiss, Roberto Gonzalez, who was previously Treasury’s deputy general counsel. Faced with the Justice Department investigation, Binance hired an external lawyer from U.S. Its head of legal, Jared Gross, was a former mergers and acquisitions lawyer with little experience in dealing with authorities, according to two people who worked with him. Until 2020, Binance’s legal department operated on bare bones. authorities gaining access to Binance’s internal records, company messages show.Ī guide issued to employees for one encrypted messaging service listed its “automatic self-erasing messages” as a benefit. scrutiny by setting up a new American exchange that would draw regulators’ attention away from the main platform, as reported by Reuters in October. Instead, Zhao approved a proposal from a person providing advice to Binance to “insulate” Binance from U.S. Bankman-Fried says he didn’t knowingly commit any wrongdoing. In a bankruptcy hearing, attorneys for FTX said the exchange was run as a “personal fiefdom” of Bankman-Fried.
The Justice Department has opened an investigation into FTX’s handling of company funds, Reuters has reported. Founder Sam Bankman-Fried had boasted his exchange was the “most regulated,” but he based it in the Bahamas, where oversight was light, and secretly used customer deposits. That sum dwarfed its former challenger FTX, which handled $230 billion in trades that month, according to data site CryptoCompare.įTX imploded in early November, triggering a wave of public demands for greater regulation of the cryptocurrency industry. The exchange processed trades worth around $1.6 trillion in October, about half of the entire crypto market’s trading volume. Launched by Zhao in Shanghai in 2017, Binance now dominates the crypto industry. sanctions, and plotted to evade regulators in the United States and elsewhere.īinance has disputed the articles, calling the illicit-fund calculations inaccurate and the descriptions of its compliance controls “outdated.” The exchange has said it is “driving higher industry standards” and seeking to “further improve our ability to detect illegal crypto activity on our platform.” The reporting showed that Binance kept weak anti-money laundering controls, processed over $10 billion in payments for criminals and companies seeking to evade U.S.
Reuters has investigated Binance’s financial crime compliance over the course of 2022. He enforced strict secrecy rules on employees, telling them to use email as little as possible and to communicate using encrypted messaging services, according to company messages that Reuters has previously reported. government agency that was investigating Binance. He instigated a recruitment spree last year that led to the hiring of officials from the Internal Revenue Service’s Criminal Investigation division, the U.S. The new reporting shows that the case has shadowed Binance for most of its five years in existence, shaping Zhao’s management of the company while he drove its explosive growth around the world. This advertisement has not loaded yet, but your article continues below. Prosecutors’ deliberations on charging Binance have not been previously reported. law enforcement officials and ex-Binance advisors, along with a review of company records, Reuters has pieced together the most comprehensive account so far of how the investigation developed and how Binance has sought to keep it at bay. Through interviews with almost a dozen people familiar with the case, including current and former U.S. 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. Justice Department regulations say that money laundering charges against a financial institution must be approved by the MLARS chief. Attorney’s Office for the Western District of Washington in Seattle and the National Cryptocurrency Enforcement Team. The inquiry involves prosecutors at three Justice Department offices: the Money Laundering and Asset Recovery Section, known as MLARS, the U.S.
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