The US Department of Justice (DOJ) is reportedly seeking more than $4 billion from Binance to settle its ongoing criminal case.
Binance, a cryptocurrency exchange, has been under persistent scrutiny from US regulators, with the DOJ considering charges of fraud.
The resolution, if accepted, would also resolve criminal charges against Binance founder Changpeng Zhao.
This plan seeks to settle allegations of money laundering, bank fraud, and sanctions violations that have haunted Binance for years.
In October 2020, the SEC subpoenaed Binance for documents related to its operations and customer information.
Alleging non-compliance with US securities laws, SEC accused Binance of potentially offering unregistered securities to US investors.
Binance, based in the Cayman Islands, rejected the SEC’s jurisdiction.
In June 2021, SEC issued another subpoena, met with Binance’s refusal.
In July 2022, SEC formally sued Binance, alleging it operated as an unregistered securities exchange and provided unregistered securities to US investors.
Binance denied the charges and vowed to contest them.
Changpeng Zhao, currently based in the United Arab Emirates (UAE), is reportedly beyond the immediate reach of US extradition due to the absence of a treaty.
However, the lack of an extradition agreement wouldn’t prevent him from voluntarily visiting the US. Despite these developments, Binance has not issued any statements regarding the reported proposed resolution.
This potential agreement assumes particular significance amid ongoing US scrutiny of Binance, previously facing a lawsuit from the Commodity Futures Trust Commission (CFTC).
The legal action specifically accused Binance of “willful evasion” of US laws, marking a chapter in the extended regulatory challenges the exchange has navigated.
Depending on how the case progresses, it may have far-reaching implications for the entire cryptocurrency industry.
A ruling against Binance might prompt regulators to intensify scrutiny on other crypto exchanges, potentially leading to more stringent regulations.
In context, previous charges from the US Securities and Exchange Commission and the Commodity Futures Trading Commission have put Binance.US’ operations in jeopardy.
In a blog post, Zhao called the complaint an “incomplete recitation of facts”
This has resulted in a wave of layoffs, including the departure of the US CEO and a reduction of over one-third of the workforce, comprising more than 100 positions.