Binance Faces Australian Probe as Legal Troubles Mount Worldwide

Australian Officials Seek Internal Communications and Data from Binance US Employees

In another blow to leading cryptocurrency exchange Binance, Australian officials have reportedly reached out to current and former employees of the company’s US operation, demanding access to internal communications and data on their personal devices. This move by the Australian Securities and Investments Commission (ASIC) marks yet another jurisdiction where regulators are tightening the noose around Binance amid a slew of legal troubles.

According to a source familiar with the situation, representatives from ASIC individually contacted employees of Binance outside the company’s US offices this week in a coordinated effort. This follows a series of weighty accusations against the exchange, including investigations by US regulators, a raid in France, and a denial of licensing in the Netherlands. Despite these mounting challenges, Binance CEO Changpeng Zhao denies that the recent departures of key legal and compliance executives are cause for concern.

Binance had long operated without significant regulatory intervention. However, the recent onslaught of legal cases has left the company reeling. Since the US Securities and Exchange Commission (SEC) filed charges against Binance and Zhao last month, the exchange has witnessed substantial customer withdrawals, and its native BNB token has experienced a decline. Earlier this year, the US Commodity Futures Trading Commission (CFTC) made similar accusations against Binance, alleging intentional evasion of government oversight.

The allegations against Binance carry significant implications, including potential criminal and civil misconduct, as well as national-security-related concerns. Alex Zerden, founder and CEO of advisory firm Capitol Peak Strategies and a former US Treasury Department official, emphasized the gravity of the situation. Zerden stated that given Binance’s global footprint, any investigation into the company and the allegations would likely span multiple jurisdictions and require sustained cooperation among authorities.

The current case by ASIC focuses on Binance’s former derivatives operations in Australia. However, a spokesperson for the company clarified that investigators did not visit their offices. While Binance still operates a spot-trading exchange in the country, its futures products were shut down earlier this year. ASIC confirmed an ongoing investigation with Binance but refrained from providing operational details or confirming any searches conducted.

Last month, Binance faced a raid by the public prosecutor in Paris, who suspected the exchange of aggravated money laundering and providing illegal services. The investigation in France revolves around allegations that Binance operated as a digital asset service provider before obtaining regulatory approval in May, as well as accusations of involvement in money laundering activities.

Additionally, Binance recently withdrew from the Netherlands when it failed to obtain a virtual asset service provider (VASP) license from the local financial regulator, which certifies compliance with anti-money laundering requirements. Throughout all of these legal challenges, reports have emerged suggesting the departure of several key executives from Binance, including the general counsel, chief strategy officer, senior vice president for compliance, and chief business officer. However, CEO Changpeng Zhao dismissed media claims that these departures were related to his handling of a US Department of Justice investigation.

The simultaneous pushback, lawsuits, and investigations faced by Binance across various jurisdictions suggest that regulators and prosecutors are collaborating and sharing information. While cross-border information sharing can often be cumbersome, friendly jurisdictions with similar concerns can expedite the investigation process. Binance maintains its commitment to cooperating with regulatory requests, according to a company spokesperson.

As the scrutiny intensifies and legal challenges pile up for Binance, the cryptocurrency exchange finds itself in a precarious position. The outcome of these investigations will undoubtedly have far-reaching implications for the company’s operations and the broader cryptocurrency industry.