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Binance Under DOJ Microsope and Unprecedented Monitorship

Enforcement | Dec 11, 2023

DALL E Binance monitorship - Binance Under DOJ Microsope and Unprecedented Monitorship

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The United States Department of Justice (DOJ) unveils a 'compliance wishlist' and extensive monitorship over Binance

Unsealed on December 8, 2023, the DOJ's monitorship over Binance's operations and business activities is described in an 11-page document, which includes several stringent obligations for the crypto exchange. This development follows Binance and its former CEO, Changpeng "CZ" Zhao, admitting to violating U.S. money laundering and terror financing laws, agreeing to pay $4.3 billion in fines on November 21, 2023.

See:  Ex-Binance CEO CZ Faces Up to 10 Years in Prison

These include:

  • Binance must cooperate by providing U.S. authorities access to all documents, records, and resources upon request. This includes information related to its former employees, agents, intermediaries, consultants, representatives, distributors, licenses, contractors, suppliers, and joint venture partners.
  • Various sections of the DOJ's criminal division will closely monitor Binance's activities. These include the section for money laundering and asset recovery, the section for national security, the section for counterintelligence and export control, and the office for the Western District of Washington’s United States Attorney.
  • In addition to DOJ oversight, Binance will also be subject to five years of oversight by FinCEN.

This unprecedented level of oversight is likely to cost Binance millions of dollars. John Reed Stark, a former Securities and Exchange Commission (SEC) official, described Binance's new compliance commitments as a "consulting firm’s wish list" that could potentially shut down the platform. The SEC is also using Binance's settlement to strengthen its case against the exchange, pressing 13 charges related to unregistered offers and sales of various tokens and products.

Outlook

Binance’s agreement with the DOJ and FinCEN subjects it to an unparalleled degree of government oversight. This is comparable to a round-the-clock financial audit, where the company is responsible for the expenses of a government-appointed team vigilantly overseeing its operations.

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Such intense scrutiny brings to the forefront the question of whether a traditionally private and non-transparent firm like Binance can evolve into an entity that operates with full transparency and adherence to legal standards.


NCFA Jan 2018 resize - Binance Under DOJ Microsope and Unprecedented MonitorshipThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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