Binance Faces Over $4 Billion Demand from the US Justice Department
Date: 2023-11-23 Author: Dima Zakharov Categories: BUSINESS, IN WORLD
US Justice Department's Multi-Billion Dollar Demand
In a significant development reported by Bloomberg, the US Justice Department is allegedly demanding more than $4 billion from Binance, marking a crucial step in the resolution of a years-long investigation into the platform. According to sources, the department may bring criminal charges against Binance's founder, Changpeng Zhao.
Market Reaction and Negotiations
The news had an immediate impact on Binance Coin (BNB), which initially dropped but then sharply rose from $238 to $268. The token's market capitalization increased by over $2 billion, as per TradingView data.
Insiders familiar with the negotiation process between the US Justice Department and Binance suggest that the agency is contemplating criminal charges against Changpeng Zhao as part of a settlement related to alleged money laundering, bank fraud, and sanctions violations.
Binance has not responded to numerous emails and phone calls from journalists seeking comment on the situation, while the Justice Department has declined to provide any official statements.
Potential Settlement and Financial Implications
According to Bloomberg's anonymous sources, an official decision from the department might be published by the end of November. The exact terms and structure of the proposed settlement, as well as specific charges, are yet to be confirmed. It is anticipated that Binance could be required to pay over $4 billion, making it one of the largest fines in a cryptocurrency-related criminal case.
The investigation is being led by the Department of Justice's Money Laundering and Asset Recovery Section, along with the US Attorney's Office for the Eastern District of New York and the National Security Division. Some sources suggest that the regulators aim to strike a compromise that allows Binance to continue its operations without triggering a market collapse and negative consequences for users.
One source indicates that Binance is seeking to minimize risks in any regulatory resolution, including pushing for a deferred prosecution agreement.
If Binance and the US Justice Department agree to a deferred prosecution, the department will file a criminal complaint against the company, but criminal proceedings will be put on hold as long as the company fulfills the specified conditions, typically involving the payment of a substantial fine and providing detailed information about its alleged wrongdoings. A monitoring process will be established to ensure the company's compliance with the imposed requirements.
Additionally, the Justice Department is reportedly investigating Binance for alleged facilitation of circumventing US sanctions against Iran and Russia. The exchange is also under scrutiny for permitting transactions that contributed to the financing of the Hamas movement. The department insists on a change in the company's management, but it remains unclear if charges will be brought against other Binance executives besides Zhao.
