The Brooklyn District Attorney's office has accused Binance, the world's largest cryptocurrency exchange, of deliberately routing law enforcement requests through the United Arab Emirates, a move that prosecutors say slows down fraud investigations. The allegation, made in a recent court filing, points to a pattern of delays that hinder efforts to track illicit funds moving through the exchange.
How the routing works
According to the Brooklyn DA, when U.S. law enforcement agencies send formal requests for customer data or transaction records, Binance directs those inquiries to its offices in the UAE rather than handling them from its U.S. operations. The DA argues that this creates an extra layer of bureaucracy and takes advantage of the UAE's legal framework, which can be slower to respond to foreign law enforcement demands.
The allegation suggests that Binance is deliberately using the UAE as a bottleneck. The company has not publicly commented on the specific claim, but has previously stated that it complies with all applicable laws and cooperates with authorities where it operates.
Why the UAE matters
The United Arab Emirates has become a major hub for cryptocurrency firms, including Binance, which has a significant presence there. However, the DA's office contends that the UAE's data protection and financial secrecy laws make it harder for U.S. investigators to obtain timely information about suspicious transactions. The routing, they say, is not a matter of logistics but a tactic to frustrate probes.
Binance has faced scrutiny from regulators around the world. In the U.S., the company has been under investigation by the Department of Justice and the Securities and Exchange Commission. The Brooklyn DA's allegation adds a new layer to those concerns, focusing specifically on how the exchange handles law enforcement requests.
Impact on fraud investigations
Fraud cases involving cryptocurrency often rely on speed. When investigators suspect money laundering or scams, they need to freeze assets or trace funds quickly. Delays of days or weeks can allow criminals to move money beyond reach. The Brooklyn DA says that routing requests through the UAE introduces exactly those kinds of delays.
The office did not provide specific examples of cases that were harmed, but the allegation implies that the practice has become routine. The DA is seeking to compel Binance to change how it processes U.S. law enforcement requests, though the legal mechanism for that remains unclear.
Binance has not yet filed a response to the allegation in court. The case is ongoing.
