The U.S. Department of Justice (DoJ) is reportedly seeking over $4 billion from Binance Holdings Ltd. as part of the proposed resolution of the lengthy investigation against the world’s largest cryptocurrency exchange platform by trading volume.
The said settlement could include charges against the exchange’s founder and CEO, Changpeng Zhao (CZ), over bank fraud, money laundering, and sanctions violations, Bloomberg reported, citing people familiar with the discussions.
The settlement announcement could happen by the end of this month, indicating that both parties are currently engaged in ongoing communication. If the settlement pushes through, it would be one of the largest penalties paid in a case related to cryptocurrency.
But what are the terms of the settlement?
Binance wants a “deferred prosecution agreement,” which, under the terms of the agreement, means the DoJ will file a criminal complaint but will not prosecute the business as long as it meets several conditions, including paying the penalty and agreeing to a detailed settlement of the facts of its wrongdoing.
The settlement agreement intends to strike a balance that would enable Binance to continue its operations instead of risking a collapse that could negatively impact the market and crypto holders, people familiar with the matter disclosed.
The news was well-received by the crypto community, with some believing that it is bullish and what the industry needs these days.
“Binance setting with the US regulators would be super bullish!! Not sure if reports are true but I personally am hoping for a settlement and for the industry to move forward,” Galaxy CEO Mike Novogratz said.
Binance setting with the US regulators would be super bullish!! Not sure if reports are true but I personally am hoping for a settlement and for the industry to move forward.
— Mike Novogratz (@novogratz) November 20, 2023
However, there are some who think Binance would not agree with the settlement, including former SEC Office of Internet Enforcement chief John Reed Stark, who claimed that the exchange would unlikely abide by a DPA since it would include round-the-clock monitoring and admit to crimes that could complicate legal issues in other jurisdictions.
“Why It’s Hard to Believe That Binance Will (or Can) Agree to a Deferred Prosecution Agreement with US DOJ (Though I Guess Anything is Possible in the Cryptoverse),” Stark said in a post on X.
Why It’s Hard to Believe That Binance Will (or Can) Agree to a Deferred Prosecution Agreement with US DOJ (Though I Guess Anything is Possible in the Cryptoverse).
Apparently, per a team of highly respected Bloomberg investigative journalists, the U.S. Justice Department is… pic.twitter.com/2SadwouuT8
— John Reed Stark (@JohnReedStark) November 20, 2023
“Given Binance’s alleged wrongdoing, any U.S. DOJ DPA will have to be comprehensive, robust and formidable. But Binance is a red-flag potpourri, currently even unwilling to divulge the location of its headquarters or to submit to a traditional audit of any kind,” Stark further said.
“The stark reality is that neither Binance nor any other mega-crypto firm has ever been party to a U.S Justice Department deferred prosecution agreement, which will likely be tantamount to undergoing a 24-7, 365 days a year financial colonoscopy – and paying millions of dollars for the privilege,” he added.
