Binance, the world’s biggest cryptocurrency exchange, is reported to have processed almost $346m worth of Bitcoin for Bitzlato, a now shuttered exchange whose founder was arrested in Miami, Florida last week.
According to Reuters, the exchange was shut down as part of an investigation by the US Department of Justice (DoJ), and its founder Anatoly Legkodymov was apprehended upon landing on US soil.
Reuters, which previously suggested that Binance may have breached sanctions by processing crypto for Iranians, is now investigating practices at Binance that could add to the other cases of questionable, although not illegal, practices.
Reuters said that it had found no evidence of illegal activity. However, some sources have suggested that regulators may now expect more from Binance and how it scrutinizes transactions.
Bitzlato is implicated in the processing of $700m worth of illicit funds moved around in the form of crypto to avoid detection.
The DoJ has found sufficient evidence to tie the exchange, and its founder, to direct breaches of law, and is now questioning whether Binance processed the funds knowingly and was aware of the potential dangers they posed.
According to the US Treasury’s Financial Crimes Enforcement Network (FinCEN), Binance is the only major exchange to have processed funds for Bitzlato.
Bitzlato, FinCEN also explained, was linked to running money laundering operations tied to illicit Russian money.
Binance does not seem worried by the latest reports, as the company has already provided substantial assistance to authorities and has offered to help further.
In a reply to Reuters, the company said that it was open to “working collaboratively” with authorities.
Meanwhile, hedge funds in the US that have links with Binance are also being probed by authorities.