DOJ Is Seeking $4 Billion From Binance, Criminal Charges Against CZ

By Decrypt November 21, 2023 In Binance

The long-running criminal investigation by U.S. authorities into crypto exchange Binance could be settled before they show up in a lawsuit—but it’ll cost the company $4 billion.

Crypto exchange Binance is nearing a settlement with the U.S. Department of Justice to resolve a criminal investigation into alleged money laundering, bank fraud, and sanctions violations, unnamed sources told Bloomberg. If the settlement deal goes through, it would be one of the largest-ever penalties in a crypto case.

Negotiations have included the possibility of criminal charges against Binance’s founder and CEO Changpeng Zhao, also known as CZ. However, as it currently stands the deal would allow the crypto exchange—the world’s largest by volume—to keep operating while holding its leadership accountable.

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Binance CEO CZ. Image: CZ/Twitter

If finalized, Binance would likely pay the fine as part of a deferred prosecution agreement. This would require Binance to meet prescribed conditions like overhauling compliance programs, according to the report.

The DOJ has been investigating whether Binance facilitated transactions violating U.S. sanctions on Iran and Russia. Scrutiny ramped up following crypto exchange FTX’s collapse and founder Sam Bankman-Fried’s fraud conviction.

In August, the exchange came under regulatory pressure to stop doing business in Russia. Then on September 27, the exchange sold its Russia business for an undisclosed amount to CommEX, a crypto exchange that officially launched on September 26.

The announcement read that the two entities “will partner to inform users how to migrate their assets to CommEX.”

While the DOJ is said to have pushed for leadership changes, it’s uncertain if executives beyond CZ will be charged. The potential settlement follows other U.S. regulatory action against Binance over issues like misusing customer funds and failing to register with derivatives regulators.

The Commodities and Futures Trading Commission and Securities and Exchange Commission each have ongoing lawsuits against Binance. The CFTC lawsuit—filed in March—alleges the exchange violated trading and derivatives rules. The SEC complaint—filed in June—alleges the company failed to restrict U.S. investors from accessing Binance.com, and operating as an unregistered exchange, broker, and clearing agency.

Binance has disputed allegations, arguing agencies rely on incomplete facts and blunt enforcement tools rather than nuance. But legal troubles have crippled Binance’s U.S. unit.

Editor’s note: This article was written with the assistance of AI. Edited and fact-checked by Stacy Elliott.

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