Binance Could Be Facing Money Laundering Charges

Table of Contents

• DOJ Considers Charging Binance
• Other Departments Involved
• Money Laundering And Other Charges
• Criminal Charges Could Shake Market 

The U.S. Department of Justice is conflicted about the decision to charge the crypto exchange in the 2018 anti-money laundering laws investigation. 

DOJ Considers Charging Binance

The crypto exchange, the largest in the world by trading volumes, has been the subject of a long-running investigation into its compliance with anti-money laundering (AML) laws. The investigation started back in 2018 and has amassed evidence that, according to some federal prosecutors, is sufficient to charge the company. Reuters reports that around half a dozen federal prosecutors believe the evidence collected against the exchange will be sufficient to back up filing criminal charges against individual Binance executives, including CEO Changpeng Zhao. However, other prosecutors have protested, saying that more crucial evidence is required to move legally against the crypto exchange.

Other Departments Involved

Besides the Justice Department, three other government agencies are involved in the investigation. According to the DOJ, money laundering charges against a financial company need to be approved by the head of the Money Laundering and Asset Recovery Section (MLARS). Furthermore, the heads of the United States Attorney’s Office for the Western District of Washington in Seattle and the National Cryptocurrency Enforcement Team (NCET) must also approve before the DOJ can take any action against the crypto company. 

Money Laundering And Other Charges

Even though the company has recently revealed that its BTC reserves are over-collateralized, the Reuters investigation has revealed that the crypto firm has been financially non-compliant with AML laws. Not only did Binance fail to enforce strict anti-money laundering controls, but it also processed over $10 billion in payments for sanctioned individuals and groups and conspired to evade U.S. regulators. The company could be facing charges of unlicensed money transmission, money laundering conspiracy, and criminal sanctions violations. The Justice Department will have the final say in whether to indict Binance and its executives, negotiate a plea deal, or drop the case entirely. 

Criminal Charges Could Shake Market 

Moving ahead with the criminal proceedings would be another nail in the crypto coffin. The industry has already been struggling in the wake of the growing inflation, the LUNA debacle, the FTX crash, and the many exploits by cybercriminals. Binance and its CEO Changpeng Zhao have been maintaining one of the industry's few remaining pillars of support. Criminal charges at this point could prove lethal for the industry, which might not recover. 

Reuters has unearthed that Binance has tried to keep the matter quiet. Indeed there has not been any news or reports of prosecutors deliberating about charging the company. The crypto company has argued that a criminal prosecution could wreak havoc on an already delicate market and has led to speculations that a conspiracy is brewing to destabilize Binance and the entire crypto market. Binance’s legal team has been meeting with officials from the Justice Department to work out a solution, including potential plea deals. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.