U.S. Federal Prosecutors Mull Criminal Charges Against Binance and Its CEO
After the FTX incident last month, the crypto market could possibly see another shockwave coming. As per the latest reports, prosecutors at the U.S. Department of Justice (DoJ) are considering to file criminal charges against crypto exchange Binance along with other company executives including CEO and founder Changpeng Zhao (CZ).
Citing four sources familiar with the matter, the Reuters report notes that prosecutors remain divided on whether to move aggressively against the exchange or take some more time to review the entire evidence. Around a dozen prosecutors have opposed moving “aggressively” against Zhao’s company. As a result, the U.S. Department of Justice hasn’t been able to reach consensus on this matter so far.
As per the sources, the charges against Binance are related to an investigation launched in 2018 and focused on the exchange’s compliance with AML laws and sanctions. The probe relates to the suspicions “unlicensed money transmission, money laundering conspiracy, and criminal sanctions violations”.
As per the Reuters report, prosecutors at the three Justice Department offices are involved. This includes the U.S. Attorney’s Office for the Western District of Washington in Seattle, the Money Laundering and Asset Recovery Section (MLARS), and the National Cryptocurrency Enforcement Team.
The report further adds that Binance’s defence attorneys recently held meetings with DoJ officials. The crypto exchange under question has argued that a criminal prosecution could have negative impact on the crypto space which is trying hard to recover from the aftershocks of FTX and Terra collapses this year.
Soon as the Reuters report started circulating in the crypto space, Binance said that the publication has “got it wrong again”. It noted: "We don't have any insight into the inner workings of the US Justice Department, nor would it be appropriate for us to comment if we did.”
The crypto winter of 2022 has been one of the most brutal bear markets in the history of crypto. There’s have multiple high-profile bankruptcies with some of the biggest crypto lender collapsing due to heavy withdrawals and severe liquidity issue.
As a result, the entire crypto space has been on a high alert due to these incidents which have drawn greater regulatory attention. After the recent FTX collapse, Binance has moved to implementing Proof-of-Reserves system to maintain transparency with users. However, users have expressed skepticism over the recent audit conducted by Mazars on Binance’s Proof-of-Reserves.