US Reporter

US Justice Department Seeks Over $4 Billion from Binance in Ongoing Investigation

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The US Justice Department is in negotiations with Binance Holdings Ltd. to resolve a lengthy investigation into the world’s largest cryptocurrency exchange. As part of the proposed resolution, the Justice Department is seeking more than $4 billion from Binance. The investigation covers alleged money laundering, bank fraud, and sanctions violations.

Negotiations include the possibility of criminal charges against Binance’s founder, Changpeng Zhao, also known as “CZ,” in the US. While Zhao resides in the United Arab Emirates, which lacks an extradition treaty with the US, he could voluntarily face charges.

Binance’s Response

Binance has not responded to inquiries about the ongoing investigation. The Justice Department declined to comment. The resolution, if reached, could be announced by the end of the month, though the situation remains dynamic.

Following reports of the negotiations, the BNB cryptocurrency, native to Binance, rose by up to 8.5% to $266.42, indicating potential market implications.

The exact timing, structure, and specific charges of the proposed resolution are unclear. However, it is anticipated that Binance may be required to pay over $4 billion, constituting one of the largest penalties in a criminal cryptocurrency case.

The agreement seeks to strike a balance allowing Binance to continue operating, avoiding a collapse that could negatively impact markets and crypto holders. Binance has sought to minimize its exposure in any settlement, including the possibility of a deferred prosecution agreement.

Investigation Details

The Justice Department’s investigation, led by the criminal division’s money laundering and asset recovery section, focuses on possible violations related to US sanctions against Iran and Russia. Binance has also been under scrutiny for transactions possibly financing Hamas.

If a settlement is reached, it would represent one of the largest investigations the Justice Department has conducted into a cryptocurrency company, following the recent resolution involving the collapse of crypto exchange FTX.

While Justice Department officials have pushed for a broad leadership change at Binance, it remains unclear if other executives, besides CZ, would face charges. Binance has faced legal and regulatory action from various US agencies, including lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission. Binance has contested these lawsuits, expressing disappointment with the enforcement actions.