By Mark Hunter
2 hours agoTue Nov 21 2023 10:12:23
Reading Time: 2 minutes
The DoJ is reportedly seeking over $4 billion from Binance, aiming to settle a multiyear criminal investigation
The charges would include bank fraud, sanctions violations, and money laundering.
Binance’s co-founder and CEO, Changpeng Zhao, may face criminal charges
The US Department of Justice (DoJ) is reportedly seeking over $4 billion from Binance to resolve a criminal investigation involving allegations of bank fraud, sanctions violations, and money laundering. If accepted, this settlement would conclude a multiyear probe, making it a significant development in the crypto industry. Binance’s co-founder and CEO, Changpeng Zhao, may also face criminal charges as part of this potential agreement which has been hanging over the crypto space for several years now.
Sanctions Violations Top the Agenda
The investigation into Binance is being led by the DoJ’s money laundering and asset recovery section department, along with the national security division and the US attorney’s office in Seattle. No official charges of a criminal nature have yet been laid at Binance’s door with regard to this investigation, although the existence of such a probe has been something of an open secret in the crypto community, with only civil charges brought to date.
The DoJ is investigating Binance for potential violations related to sanctions against Iran and Russia, examining whether the exchange aided in evading these sanctions. Additionally, Binance is under scrutiny for potential involvement in transactions supporting Hamas.
Criminal Complaints Coming
The proposed agreement aims to enable Binance’s ongoing operations, preventing potential market disruptions and safeguarding crypto holders, three sources familiar with the matter told Bloomberg. Binance is working to limit its exposure in the settlement, actively pursuing a deferred prosecution agreement, according to another source.
In the event of a deferred prosecution agreement, the Justice Department would file a criminal complaint against Binance, but prosecution would be deferred if the company adheres to specified conditions, typically involving a significant penalty and a detailed admission of wrongdoing. Ongoing compliance monitoring would also be established.
Details are Sketchy but Zhao Targeted
The exact timing and structure of the proposed resolution and specific charges still aren’t clear, but Binance would likely be expected to pay more than $4 billion, which would be one of the largest-ever penalties in a criminal cryptocurrency case. Zhao would also likely face criminal charges in the US, with no extradition agreement being in place between the US and Zhao’s UAE home any arraignment would have to be voluntary.
The deal, if finalized, would represent a notable escalation in the regulatory challenges faced by the world’s largest cryptocurrency exchange. Throughout the year, Binance has clashed with various US agencies; in March, the Commodity Futures Trading Commission filed a lawsuit, accusing Binance of illegally accessing US customers, while in June, the Securities and Exchange Commission filed 13 civil charges against Binance-related entities and Zhao.
Neither Binance, Zhao, nor the DoJ has commented on the reports.
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