Federal prosecutors dig dirt on Changpeng Zhao, Binance Coin nosedives

  • Federal prosecutors asked for access to CEO Changpeng Zhao’s communication investigating the exchange’s anti-money laundering. 
  • Binance is currently under investigation over potential violations of the Bank Secrecy Act, according to Reuters.
  • Binance Coin price nosedived, observing a 3% decline overnight. 

US Prosecutors are investigating the world’s largest crypto exchange and CEO Changpeng Zhao. The US Justice Department’s money laundering division is digging CZ’s communication for illegal transactions and information on the recruitment of US Customers. 

Also read: Trade Ethereum for free on Binance: World’s largest exchange waves fees for a month

US Justice Department’s money laundering division investigates Binance CEO

US Prosecutors requested communication records of Changpeng Zhao, CEO of Binance in late 2020. The US Justice Department’s money laundering division continued its investigation in the world’s largest crypto exchange, according to Reuters. 

The exchange was asked to voluntarily hand over messages relating to its detection of illegal transactions and recruitment of US customers. CZ and twelve other executives and partners of Binance have been included in the request for messages and communications. 

Sources close to the matter went on to say US authorities are investigating whether Binance may have violated the Bank Secrecy Act. Under this act, crypto exchanges that conduct substantial business in the US must register with the Treasury and comply with anti-money laundering guidelines. Violators of the Bank Secrecy Act could face jail sentences.

A Binance spokesperson was quoted as saying:

This is a standard process for any regulated organization and we work with agencies regularly to address any outstanding questions.

The spokesperson went on to add that Binance has industry leading global security and compliance team which boasts more than 500 employees. 

Binance Coin price nosedived in response to the development. BNB yielded nearly 3% losses. Analysts predicted further decline in BNB price. NekozTek, a pseudonymous crypto analyst identified a short opportunity in the BNB price chart. 

BNB-USDT price chart

The analyst acknowledged that he is sitting out the short opportunity for CZ. It is likely that the Binance CEO comes out with a comment on the investigation and how the exchange is handling the same. The transparency could fuel a bullish sentiment among holders. 

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