Monday, December 4, 2023

US Wants More Than $4 Billion From Binance To End Criminal Case

Binance Faces Legal Storm in Brazil: CEO and Executives Accused

The U.S. Justice Department is reportedly seeking over $4 billion from Binance Holdings to resolve a criminal investigation that has been ongoing for several years. This proposed resolution is a significant move for the world’s largest cryptocurrency exchange, focusing on allegations of money laundering, bank fraud, and sanctions violations. The negotiations also suggest the possibility that Binance’s founder, Changpeng Zhao, may face criminal charges in the United States as part of the agreement to conclude the investigation.

Binance Is Asked To Pay $4 Billion

According to Bloomberg News, Binance Holdings Ltd. is in negotiations with the U.S. Department of Justice (DOJ) to pay a $4 billion settlement over accusations of various criminal activities. These discussions also entertain the possibility of Binance’s founder, Changpeng Zhao, facing criminal charges in the U.S.

The company is currently under investigation by American authorities for allegations of money laundering, bank fraud, and breaching U.S. sanctions laws. These negotiations are expected to potentially reach a conclusion in the upcoming weeks.

The extensive investigation by the Justice Department, spanning over a year, might result in various criminal charges against both Binance and its founder. The potential charges could include money laundering, bank fraud, and violations of U.S. sanction laws.

Binance has faced continuous examination from U.S. authorities and regulators. Additionally, the Department of Justice (DOJ) considered the possibility of charging the exchange with fraud, taking into account the potential impact on the industry and the risk of triggering a bank run.

Binance and its CEO, Changpeng Zhao, have been under investigation and faced lawsuit by the Securities and Exchange Commission and the Commodity Futures Trading Commission. Should Binance consent to a U.S. fine exceeding $4 billion, it would mark one of the largest settlements in the history. However, the specific terms and business stipulations accompanying such a penalty remain unclear.

Binance Needs To Enhance Its KYC Process

The potential settlement, which could be finalized as early as the end of November, would likely necessitate Binance to pay additional sums to settle parallel investigations by the IRS, CFTC, and other agencies. Part of the settlement would also require Binance to enhance its know-your-customer procedures to better prevent the passage of illegal funds through the exchange​.

Despite its legal challenges, Binance maintains operations globally, although the allegations have taken a toll. Following the emergence of the SEC case, Binance.US, the company’s American subsidiary, reduced its workforce and ceased dollar deposits. Additionally, Binance lost its key executives globally.

Binance recently declared its departure from the Russian market, offloading its operations there to CommEX, a newly established exchange. Binance boasts over 150 million registered users worldwide. However, its market share has declined following CFTC lawsuit in March.

Additionally, the net worth of Binance founder Changpeng “CZ” Zhao decreased by $11.9 billion, along with a 38% drop in revenue at the world’s largest cryptocurrency exchange.

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Shayan Chowdhury

Shayan is a digital nomad and a professional journalist. He delivers high-quality engaging articles to Coinpedia through his in-depth research and analysis.

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