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The DOJ Closely Scrutinizes All Binance Activity

 5 months ago
source link: https://cryptomode.com/binance-scrutinized-by-doj/
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Details emerged about Binance’s extensive compliance agreements with the United States Department of Justice (DOJ). These agreements significantly increase governmental supervision of cryptocurrency exchange operations and business practices.

In-Depth Analysis of the Binance Compliance Commitments

John Reed Stark, a former Securities and Exchange Commission (SEC) official, shared an insightful analysis on X. He described Binance’s comprehensive compliance commitments as akin to a “consulting firm’s wish list.” These measures could lead to significant operational changes for the platform.

Binance’s new commitments are detailed in an extensive 11-page document. It outlines the company’s obligation to cooperate with authorities by providing access to various documents, records, and resources. That includes information on its past and present employees, agents, consultants, and various business partners.

The oversight of Binance’s activities falls under several sections of the DOJ’s criminal division. It includes units specializing in money laundering and asset recovery, national security, counterintelligence and export control, and the U.S. Attorney’s office for the Western District of Washington.

Five Years of Financial Oversight

As previously disclosed, Binance’s agreement with the U.S. government also involves five years of oversight by the Financial Crimes Enforcement Network (FinCEN). This level of scrutiny is unprecedented and is expected to be a costly affair for the exchange. Stark vividly described this as a “financial colonoscopy” available to DOJ, FinCEN, and various regulatory and law enforcement agencies around the clock.

Binance and its former CEO, Changpeng “CZ” Zhao, have acknowledged breaches of U.S. money laundering and terror financing laws. The company has agreed to pay fines of $4.3 billion as part of its settlement on November 21.

SEC’s Allegations and Charges

The SEC has levied 13 charges against Binance, dated June 5. These charges include accusations of unregistered offers, sales of various tokens and products, and failure to register its platform as an exchange or broker-dealer clearing agency.

With its latest court filing, the SEC seeks a “judicial notice” of the facts presented in Binance’s settlement. This move implies that the SEC wants the court to accept specific facts as accurate without formal evidence. It is part of the SEC’s strategy to counter Binance’s motion to dismiss the case, challenging the exchange’s claims about its U.S. presence and operations over the years.

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