The U.S. Justice Department to Binance: Pay Up $4Billion to Drop Case

The U.S. Justice Department is engaged in talks with leading cryptocurrency exchange Binance over a multi-billion dollar settlement to conclude a criminal investigation, Bloomberg News reported on November 20th.

Sources claim prosecutors are seeking over $4 billion from Binance to drop their years-long probe into potential money laundering, bank fraud violations, and other alleged financial crimes.


Keypoints

  • The US Justice Department is seeking over $4 billion from crypto exchange Binance to end a years-long criminal probe.
  • Negotiations include the possibility that Binance founder Changpeng Zhao could face criminal charges in the US.
  • Any resolution would likely impact investor sentiment toward crypto at a delicate time for the industry.
  • Binance has faced investigations from the SEC, CFTC, IRS, and DOJ on issues like money laundering and sanctions violations.
  • With crypto markets depressed, Binance has seen falling market share and executive departures amid its legal woes.

Negotiations have also touched on the prospect of filing criminal charges against Binance founder and CEO Changpeng Zhao. While based abroad in the United Arab Emirates, legal experts say Zhao could face extradition or arrest if he travels to countries with strong U.S. extradition treaties.

The colossal fine would rank among the largest in crypto history, exceeding even the $1.26 billion penalty against BNY Mellon for foreign exchange trading violations. However, the final settlement may include additional constraints on Binance’s business like mandatory compliance programs.

The pending Binance deal coincides with ongoing cases against rival exchanges FTX and BitMEX. All part of a broader regulatory crackdown, the outcome of the Binance case could sway investor confidence in crypto markets under pressure from evaporating trading volumes and lax oversight.

But Binance has run into trouble with multiple agencies beyond the Justice Department. The exchange faces litigation from both the Securities and Exchange Commission and Commodity Futures Trading Commission for allegedly violating investor protection laws. And the matters add to other international probes from agencies like the IRS and German regulator BaFin.

Now facing depleted user activity and eroded market share, Binance has also witnessed an executive exodus with the recent departures of its chief strategy officer, general counsel and chief product officer. How the crypto giant navigates the DOJ negotiations and mounting regulatory headaches may dictate its future standing in digital asset markets.

Oliver Dale

Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all.
His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact Oliver@blockonomi.com