The United States Justice Department is currently engaged in negotiations with Binance to bring an end to its investigation into the company, according to sources familiar with the discussions. A proposed agreement by the law enforcement agency would require Binance to pay $4 billion in fines, as reported by Bloomberg.
As part of the potential resolution, Binance CEO Changpeng Zhao, commonly known as “CZ,” may face the prospect of criminal charges in connection with an investigation into alleged money laundering, bank fraud, and violations of sanctions. The report notes that CZ is currently residing in the United Arab Emirates, a country without an extradition treaty with the United States, suggesting that any charges filed in the U.S. might not lead to his arrest.
It is asserted in the report that Binance is actively seeking a “deferred prosecution agreement.” This arrangement would involve the Justice Department filing a criminal complaint but refraining from prosecuting the company on the condition that it adheres to three specified conditions.
Firstly, Binance would be required to pay $4 billion in penalties. Secondly, the company would need to release a comprehensive document acknowledging areas where it failed to comply with the law. Thirdly, a monitoring process would be established to ensure Binance’s ongoing compliance with laws and regulations, with the company obligated to participate in this oversight.
It is noteworthy that in 2022, CZ filed a lawsuit against a Bloomberg subsidiary, alleging the publication of false stories asserting that he was operating a Ponzi scheme.
This legal trouble compounds the mounting issues the crypto platform is currently facing. Recently, in response to Binance’s attempt to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), the regulatory body asserted that the dismissal plea lacks legal merit.
The SEC countered Binance’s motion, claiming that the exchange’s defense is based on misinterpretations of the law, which could undermine established legal precedents crucial to the nation’s securities laws. The regulatory body argues that Binance’s approach proposes a rigid framework that is incompatible with the existing legal system.
Information for this story was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.