Australian officials this week directly sought out current and former employees of Binance’s operation in the country, demanding copies of internal communications and data from their personal devices, according to a person familiar with the government’s move against the leading crypto exchange. This marks the latest in a pile-up of legal troubles facing the company, including weighty accusations by U.S. regulators, a French raid, a denial of licensing by the Dutch, and now this probe in Australia.
If the allegations against Binance are true, they implicate very serious criminal and civil misconduct, including national-security related issues, said Alex Zerden, a former U.S. Treasury Department official. And given the exchange’s global footprint, the investigation into Binance and these allegations would likely span multiple jurisdictions and require sustained cooperation among multiple jurisdictions.
The latest case from ASIC centers on Binance Australia’s former derivatives operations, a spokesman for the company said, while the company still runs a spot-trading exchange in the country. Binance had also been raided by the public prosecutor in Paris last month on suspicion of aggravated money laundering and providing illegal services. The exchange withdrew from the Netherlands last month when it couldn’t get the Dutch financial regulator to give it a virtual asset service provider (VASP) license.
Reports have suggested that several key executives have exited Binance, including its general counsel, chief strategy officer, senior vice president for compliance and chief business officer. CZ tweeted that there’s turnover at every company, and downplayed media suggestions that some people left because of how he was handling a U.S. Department of Justice (DOJ) investigation of Binance.
The glut of pushback, lawsuits and investigations as countries in which Binance operates have simultaneously chosen to make their cases could suggest their regulators and prosecutors are comparing notes. Yaya Fanusie, director of policy for AML and cyber risk at the Crypto Council for Innovation, said there’s growing impatience among both regulators and compliant actors with firms that try to play regulatory arbitrage.
The absence so far of criminal charges against Binance officials doesn’t necessarily mean the individuals haven’t already been indicted, such as by a U.S. grand jury. Binance continues doing business around the world despite its legal woes, though the accusations have done significant damage. The company’s U.S. arm, Binance.US, cut its staff and halted dollar deposits – converting into an all-crypto exchange – in the days after the SEC case emerged.
Joshua Klayman, who leads the digital-assets arm of the law firm Linklaters in the U.S., said guidance from experienced and competent legal counsel is essential. For companies in the digital asset space, in my view, this means a legal team that understands the relevant business and technology, as well as deep knowledge of the legal and regulatory landscape that has been unfolding over the past several years.