Binance Faces $4bn Settlement to Halt US Criminal Investigation

Binance Faces $4bn Settlement to Halt US Criminal Investigation – The US Department of Justice aims to settle a criminal investigation involving Binance and its co-founder by seeking over $4 billion. The proposed agreement would conclude a lengthy investigation, focusing on bank fraud, sanctions violations, and money laundering, according to a knowledgeable source.

As per the reported potential agreement by Bloomberg, Binance’s CEO Changpeng Zhao could potentially face criminal charges. The Department of Justice refrained from providing comments, and despite repeated requests, a spokesperson for Binance remained unresponsive. This proposed agreement signifies a notable Department of Justice settlement within the cryptocurrency industry, amid heightened Washington scrutiny over alleged connections to terrorism financing in the digital asset sector.

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After Hamas’s attack on Israel on October 7, the Israeli government closed more than 100 Binance accounts and sought information on an additional 200 accounts, the majority of which were held on Binance, as reported. Last month US senator Cynthia Lummis also called on the DoJ to “reach a charging decision” on Binance. The head of cryptocurrency enforcement in the United States issued a warning this year, signaling an upcoming crackdown on digital platforms. 

Eun Young Choi, former director of the agency’s national cryptocurrency enforcement team, emphasized the Department of Justice’s focus on companies involved in criminal activities or facilitating them, such as enabling money laundering. Choi has since assumed a new role within the justice department. The agreement would represent a notable increase in the scrutiny directed at the world’s largest cryptocurrency exchange, which has been in conflicts with various major US agencies throughout the year. 

In March, the Commodity Futures Trading Commission sued the exchange and alleged it had illegally accessed US customers. In the regulator’s lawsuit, the CFTC alleged a Binance executive had said in 2020 that certain customers were “here for crime”. A colleague allegedly replied: “We see the bad, but we close two eyes.” In June, the Securities and Exchange Commission filed 13 civil charges against Binance-related entities and Zhao. 

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SEC chair Gary Gensler at the time accused Binance of engaging in an “extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law”. The financial markets watchdog chief also alleged Binance mixed billions of dollars of customer cash with a separate trading firm also controlled by Zhao. Binance has said it intends to fight both lawsuits.

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