Binance Faces Intense Government Oversight Following DOJ’s Disclosure of Compliance Obligations
Summary:
The US Department of Justice (DOJ) has disclosed Binance's compliance obligations, revealing further government oversight over the crypto exchange's operations. The comprehensive obligations detailed in an 11-page document require Binance to grant authorities access to records as needed. The DOJ's criminal division, alongside the Financial Crimes Enforcement Network (FinCEN), will maintain close supervision over the exchange, a situation that may result in significant costs for Binance. The recently unsealed legal documents are part of a new SEC filing, aimed at strengthening its case against Binance and its former CEO, using the DOJ's settlement as evidence.
On December 8, the United States Department of Justice (DOJ) revealed Binance's obligations regarding compliance, showing significant government supervision over the crypto exchange's operations and business practices. Ex-SEC official John Reed Stark shared his analysis on X (previously Twitter), referring to Binance’s comprehensive list of new compliance requirements as something that could potentially put the platform out of operation. The 11-page document outlining Binance’s new responsibilities necessitates, amongst other things, granting relevant authorities access to documentation, information and resources as needed, including details pertaining to past employees and business associates. Multiple sections of the DOJ's criminal division will keep a close watch on the exchange's doings. Binance has also agreed to a plea deal involving five years of monitoring by the Financial Crimes Enforcement Network (FinCEN). Such extensive oversight will likely result in huge expenditure for the exchange. Stark commented: "Binance’s settlement conditions it to give constant access for audit, inspection and examination to DOJ, FinCEN and a range of financial regulators and law enforcement agencies, putting the company — and its users — under perpetual strict scrutiny." The recently made public legal documents pertaining to Binance are part of a new filing by the U.S. SEC, using DOJ’s enforcement actions and settlements to further substantiate its case versus Binance and its ex-CEO Changpeng “CZ" Zhao. On June 5, the SEC lodged 13 charges against Binance citing unregistered offers and sales of certain tokens and products, and claiming the failure of Binance to register its platform. Now, the regulator seeks a "judicial notice" of the facts outlined in Binance's settlement. It means that the SEC wishes for the the court to admit a fact presented as evidence, without requiring formal presentation of evidence, said Stark. This settlement is being utilized by the SEC to dispute Binance’s recent motion to have the case dismissed, counteracting the exchange’s assertions regarding its U.S based operations and presence in the past years. Binance’s settlement with the DOJ shows that as of March 2018, it had over three million customers in the U.S. and by June 2019, around 30% of Binance's web traffic came from the U.S.
Published At
12/10/2023 12:17:53 AM
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