The US Department of Justice (DOJ) is close to reaching a settlement with cryptocurrency exchange Binance to address a lengthy investigation involving allegations of money laundering, bank fraud, sanctions violations, and other issues. Sources suggest that a settlement may be reached by the end of this month.
According to Matt Walsh, founding partner at Castle Island Ventures, a settlement with monitoring provisions could be a compromise safeguarding investors while giving Binance the opportunity to transition towards a more institutional and compliant future.
The proposed deal aims to permit Binance to continue its operations while implementing reforms in compliance practices. As reported by Bloomberg, Binance is expected to pay a penalty exceeding $4 billion, marking one of the largest fines in the history of cryptocurrency cases.
Binance’s founder, Changpeng Zhao, may also face individual criminal charges in the United States. Notably, Zhao resides in the United Arab Emirates, which lacks an extradition treaty with the US.
The legal troubles for Binance escalated earlier in the year when the Commodity Futures Trading Commission (CFTC) sued the exchange for selling unregistered futures and options to US traders in March 2023. Subsequently, in June 2023, the Securities and Exchange Commission (SEC) filed charges related to operating unregistered exchanges and making false statements about its US platform, Binance.US. The SEC alleges that Binance maintained control over Binance.US despite claims of independence.
The DOJ has also probed Binance for potential involvement in sanctions evasion with Russia and facilitating transactions that funded Hamas, designated as a terrorist group by the US.
Despite contesting the allegations, the settlement under consideration reflects Binance’s willingness to address issues and enhance compliance. The company has pursued a deferred prosecution agreement to minimize liability.
If finalized, this settlement would mark a significant step for Binance in reforming its practices without causing major disruptions to the cryptocurrency market. It emphasizes the commitment of US authorities to enforce regulatory controls on cryptocurrency exchanges.
As of the latest update, BNB has experienced a 4.7% increase over the past 24 hours, according to CoinGecko.