U.S. Department of Justice prosecutors have become divided in their approach to a long-running criminal investigation into Binance.
The DOJ has reportedly been investigating the world’s largest cryptocurrency exchange since 2018. According to Reuters sources prosecutors have been investigating Binance for unlicensed money transmission, money laundering conspiracy and criminal sanctions violations.
Although authorities have made no final decision about pressing charges, some among the prosecutors feel that the time is ripe. They believe they’ve gathered enough evidence to move strongly against the exchange, including criminal charges against chief executive Changpeng Zhao. However, other prosecutors remain unconvinced, believing further time to review more evidence is necessary.
Opinion has become divided amongst prosecutors from the three Justice Department offices working jointly on the case. These are the Money Laundering and Asset Recovery Section, known as MLARS, the U.S. Attorney’s Office for the Western District of Washington in Seattle and the National Cryptocurrency Enforcement Team.
The U.S. Attorney’s Office in Seattle launched the investigation in 2018 after encountering a string of incidents on Binance. Sources said they witnessed several instances of criminals using Binance to transfer illicit funds. Once initiated, MLARS formally joined the investigation as well, along with agents from the IRS Criminal Investigation division.
These DOJ prosecutors proceeded to request internal records from Binance, not only regarding anti-money laundering checks, but also internal communication. Sources revealed that these requests subsequently influenced Zhao’s management style.
The chief executive thereafter held staff to strict secrecy standards, instructing them to use encrypted messaging services rather than email. Zhao was also compelled to recruit experts in regulatory compliance, such as officials from the Internal Revenue Service’s Criminal Investigation division.
Meanwhile, the National Cryptocurrency Enforcement Team (NCET) was established in Oct. 2021, to concentrate on “criminal misuses of cryptocurrency.” Under Eun Young Choi, whom the Justice Department appointed as NCET’s first director, the team has joined the investigation. NCET agents have participated by gathering evidence from former Binance associates.
With the additional contribution of a supplemental government agency, investigators seem to have come to a head. According to Reuters sources, NCET and the Seattle office prosecutors believe they have enough evidence to press charges against Binance and its executives.
On the other hand, MLARS remains hesitant to proceed too swiftly with the investigation. The office is known throughout the Justice Department as taking great pains with its deliberations. However, the DOJ recently appointed a new MLARS chief from fraud, an office known for pursuing cases more aggressively.
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