The dramatic collapse of Sam Bankman-Fried‘s crypto empire late last year put the entirety of the crypto industry on red alert. Even now, those in industry worry about its potential long term effects, with SBF most recently being charged for bribing Chinese officials.
However, another high profile fintech has been potentially outed for more allegedly illegal activity. This time, it’s Binance, for whom a lawsuit has been filed by the commodity futures trading commission. The target of the suit? Binance’s derivatives transaction revenue, which the CFTC says was earning the firm $1.14B per month by May 2021.
The allegations are extensive. Binance, however, seems to have made at least some effort to avoid them. – It spent much of last year adding experts in financial crime.
The recruits include Tigran Gambaryan, formerly an IRS agent of 10 years, who joined in 2021 and was made head of financial crime compliance at Binance in December 2022. In January 2023, Holland-based Nils Andersen Röed was made deputy head of the same team, having been hired in September 2021 from Europol’s specialist dark web team.
Binance also hired ex-Morgan Stanley MD and Gemini COO Noah Perlman in February 2023 to be its chief compliance officer. Perlman was Morgan Stanley’s global head of financial crime until 2019.
An apparent federal government intelligence officer in a social media post a month ago claimed that “writing is on the wall” for Binance, alleging it to be the “major player” in crypto money laundering. Gambaryan responded that the claims were “entirely false” and said Binance’s compliance team was twice the size of FTX’s.
In his official statement responding to the CFTC’s allegations, Binance CEO Changpeng Zhao said the suit contains an “incomplete recitation of facts”
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