The US Department of Justice (DOJ) is demanding a $4 billion settlement as part of its plans to drop all charges against Binance.

Let’s discover more about this important news for Binance.

Can Binance Operate Again Paying $4 Billion to the DOJ?

Despite months of investigation by the DOJ into Binance and its CEO, Changpeng “CZ” Zhao, the department now appears receptive to an out-of-court settlement. 

According to some sources, Binance has been in talks with the DOJ to settle cases involving financial fraud, sanctions violations, and money laundering. If finalized, the $4 billion settlement will rank among the biggest in the cryptocurrency sector.

Furthermore, if an agreement is reached, the $4 billion payment would be part of a deferred prosecution settlement. The exchange would also need to meet certain criteria. This includes updating its compliance programs. The DOJ allegedly pushed for an overhaul of leadership at Binance. However, there’s no clarity if regulators will charge other Binance executives aside from CZ. 

The exchange has not enjoyed a rosy relationship with US regulators. And things intensified this year. The crypto exchange was charged with operating in the US without a license and choosing a less transparent policy. Several reports emerged a few months ago linking Binance to the Chinese government. However, the exchange denied such ties.

In addition, the Department of Justice has been investigating whether Binance violated US sanctions on Iran and Russia by enabling users from those countries to transact on its exchange.

US Investigates Crypto Platforms

Washington has increased its scrutiny of crypto platforms and their executives. This comes after multiple claims of crypto exchanges being used to facilitate terrorism financing. Concerns about crypto exchanges worsened after Hamas attacked Israel in early October. Authorities shut down several Binance accounts linked to the group. Afterward, US Senator Cynthia Lummis urged the DoJ to “reach a charging decision” over Binance.

Other US regulators, including the SEC and the Commodities and Futures Trading Commission, are also pursuing legal actions against the exchange. The exchange was sued in March by the CFTC, which claimed it had gained unauthorized access to US investors.

The CFTC claimed in its lawsuit that a Binance executive had stated in 2020 that some of their customers were “here for crime.” According to reports, a coworker responded, “We see the bad, but we close two eyes.”

The SEC filed charges against Zhao and various Binance-affiliated companies in June. In addition, the SEC accused the exchange of an “extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.” The SEC also said that Binance had commingled billions of dollars worth of customer funds with another trading company that Zhao owned. 

The exchange has denied all charges. But its US affiliate has taken a huge hit from these accusations. 

Should Binance Pay the $4 Billion?

The details of the negotiations are still sketchy. However, several crypto experts have given their say on the matter. Some believe that if Binance agrees to the $4 billion payment, the exchange will admit wrongdoing.

One Twitter user painted a possible narrative. The user claimed that US lawmakers would arrest CZ. The exchange would appoint a new CEO to continue its operations. Close sources revealed that the settlement is part of an arrangement to avoid a Binance collapse, which would utterly affect the crypto market. 

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.


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