Justice Department Seeks $4 Billion Penalty and Admission of Wrongdoing in Binance Probe

The Justice Department seeks over $4 billion in penalties from Binance to settle a criminal investigation, with the crypto firm required to admit compliance failures under a deal.

Key Insights

  • Justice Department in talks with Binance to settle criminal probe for $4 billion.
  • Agreement would allow Binance to continue operating with admission of wrongdoing.
  • Binance founder CZ could still face individual charges despite deal.

WASHINGTON – The U.S. Justice Department is engaged in advanced talks with cryptocurrency exchange Binance to resolve a long-running investigation into alleged criminal activity, according to people familiar with the negotiations.

The tentative agreement would require Binance to pay a massive $4 billion in fines and publish an admission of areas where it failed to comply with U.S. laws, including anti-money laundering regulations. In return, Binance would avoid prosecution and be allowed to continue operating in the U.S. while adhering to stricter oversight.

A deal could potentially be announced by the end of November, though talks remain fluid.

Binance Founder Could Still Face Charges

As part of any agreement, Binance founder and CEO Changpeng Zhao may face individual charges connected to the Justice Department’s investigation into money laundering, bank fraud and sanctions violations.

Read also! CZ Denies Binance U.S. Used Ceffu Amid SEC Probe

Zhao currently resides in the United Arab Emirates, which does not have an extradition treaty with the U.S., meaning criminal charges may not necessarily result in his arrest.

The tentative settlement under discussion is a deferred prosecution agreement, where the Justice Department files a criminal complaint but delays actual prosecution pending the company’s cooperation.

To satisfy the deferred prosecution terms, Binance would need to pay the massive multi-billion dollar penalties, admit wrongdoing in a published document, and submit to an external compliance monitor to ensure it follows the law going forward.

Read also! U.S. Seeks to Block Former Binance CEO CZ From Leaving Country Amid Flight Risk Concerns

Crypto industry observers view the potential agreement as a pivotal moment, with one of the world’s largest trading platforms acknowledging lapses while aiming to reconcile with U.S. authorities. However, it remains unclear if both sides will ultimately sign off on the tentative deal.

Binance and the Justice Department declined to comment. Binance is the largest cryptocurrency exchange by trading volume, averaging over $50 billion in daily volume.

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