With the crypto space in disarray for the past weeks over the fall of FTX, another crypto exchange has drawn the attention of the US Department of Justice (DoJ). The report cited four persons familiar with the proceedings as sources. According to the report, the prosecutors are divided on whether to act immediately based on the evidence at hand or to take more time to source and review more evidence.
This isn’t the first time authorities would probe Binance both in the US and in other countries where it operates; however, attorneys from Gibson Dunn, the law firm representing Binance, are said to have held meetings with DoJ representatives to negotiate a potential plea deal on this particular matter, citing the adverse effects a criminal prosecution would have on the crypto market at this time of the FTX debacle, whose contagion has continued to spread throughout the industry.
Three separate DoJ offices – the Money Laundering and Assets Recovery Section (MLARS), the US Attorney’s Office for the Western District of Washington in Seattle, and the National Cryptocurrency Enforcement Team (NCET) – are involved in the prosecution.
The prosecutors are also investigating Binance’s top executives, including its CEO Changpeng Zhao (popularly known by the initials CZ). The potential charges are said to be related to a 2018 investigation launched by authorities which centered on Binance’s compliance with US anti-money laundering (AML) laws and fines, the sources familiar with the matter told Reuters.
There is currently an ongoing Binance investigation in Singapore, which commenced in November. The police in Singapore launched an investigation into Binance because of a possible breach of local payment services rules, Bloomberg said.
In a tweet responding to Reuters’ report, Binance said: “Reuters has it wrong again.” Stating that “they're attacking our incredible law enforcement team. A team that we're incredibly proud of – they've made crypto more secure for all of us.” A statement and a link to a Binance blog post highlighting Binance’s efforts to combat crypto crime are also attached to the tweet. In the statement, which Binance says is its response to Reuters, Binance said that it does not have any insight into the inner workings of the US Justice department. “We are proud to have in our ranks some of the most celebrated cyber investigators representing virtually every single major international law enforcement agency across the globe,” the statement says.
Highlighting its efforts in 2022 to comply with law enforcement agencies and stem the tide of crypto crime, Binance says its security and compliance team responded to over 47,000 law enforcement requests, increased security and compliance headcount by more than 500%, participated in over 70 anti-cybercrime workshops with global law enforcement, and became the first blockchain and crypto company to join the National Cyber-Forensics and Training Alliance (NCFTA), among other compliance and security efforts by its team.