European police say Binance's new data request policy has slowed investigations, while U.S. prosecutors face delays in some cases. Speed is critical in crypto crime, one official said.
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Binance quietly changed its law enforcement cooperation policy in April, and police in Europe say the shift has slowed investigations, the New York Times reported Tuesday.
Under the new rules, Binance requires foreign law enforcement to route certain data requests through their home government's diplomatic channels. That process, governed by international treaties, can take weeks or months. Speed matters in crypto investigations. Criminals can empty an account in seconds.
Alona Katz, an assistant district attorney in Brooklyn, told the Times she could not get account records for Binance users based in the United Arab Emirates. Binance typically turns over information within hours, she said. The new policy blocked her.
“How fast you get your records determines the outcome of your case,” Katz said. “It’s everything.”
Binance told the Times it had not slowed cooperation. The change was meant to ensure the company followed privacy laws when handling customer data, a spokesperson said.
Police from five European countries told the Times they struggled to get information from Binance outside of cases involving terrorism, child sexual abuse material or immediate threats to life. The new policy requires them to send requests to foreign government agencies first.
American law enforcement is mostly exempt from that requirement, three sources with knowledge of the policy told the Times. Binance has in some cases asked state prosecutors to route requests through other countries. That has held back at least two U.S. investigations this year, according to sources familiar with the cases and messages reviewed by the Times.
The policy change coincided with the departure of several senior Binance compliance employees. Binance last year fired or suspended compliance staff who had flagged $1.7 billion they said flowed from Binance accounts to Iranian entities. The company disputed those findings and said the workers were not disciplined for flagging compliance concerns. Several other senior compliance employees left around the same time.
The Times report comes as the White House relaxes crypto enforcement. Acting Attorney General Todd Blanche said in a memo last year the administration would no longer regulate crypto exchanges and would focus on criminals who abuse them. President Donald Trump pardoned former Binance CEO Changpeng Zhao, who was jailed for anti-money laundering failures under the previous administration. Binance has also done business with World Liberty Financial, the crypto firm founded by Trump and his sons.
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