The US Department of Justice wants more than $4bn to settle with Binance a criminal probe that has caught the world’s largest cryptocurrency exchange, and its cofounder.
A person with knowledge of the deal said that it would end a multi-year investigation by prosecutors, which focused on money laundering, sanctions violations, and bank fraud.
The person said that under the agreement, first reported by Bloomberg Binance’s co-founder Changpeng Zhao and its chief executive officer Changpeng Zhao could also be charged with criminal offenses.
The Justice Department declined to comment. Binance’s spokesperson has not responded to multiple requests for comment.
The DoJ agreement is one of the highest-profile settlements ever reached in the crypto industry. It comes as Washington increases its scrutiny over misconduct in the digital assets sector , amid allegations of links with terrorism financing.
After Hamas’s attack against Israel on October 7, the Jewish State closed over 100 Binance account and requested information about up to 200 other accounts, most held on Binance.
The US Senator Cynthia Lummis called on the DoJ last month to “reach an charging decision” regarding Binance.
The top US crypto enforcement warned this year of a crackdown on digital platform. Eun Young Choi was the former director of the DoJ’s national cryptocurrency team. She said that the DoJ focused on companies who either committed crimes or permitted them to occur, such as money laundering. Choi has a new position at the Justice Department.
The deal will also bring a new level of scrutiny to the largest cryptocurrency exchange in the world, which has been fighting with other US agencies this year.
Commodity Futures Trading Commission filed a lawsuit against the exchange in March and alleged that it had illegally gained access to US customers. The CFTC alleged in its lawsuit that a Binance executive said, “In 2020, certain customers are here for crime.” The CFTC alleged that a Binance executive had said in 2020 that certain customers were “here for crime”.
In June, the Securities and Exchange Commission filed its own 13 civil charges against Binance and Zhao.
Gary Gensler, the SEC chairman at the time, accused Binance to be involved in an “extensive network of deception, conflict of interest, lack disclosure, and calculated avoidance of the law”. The chief of the financial markets watchdog also claimed Binance had mixed billions of dollar of customer money with another trading firm controlled by Zhao.
Binance has stated that it will fight both lawsuits.