The US Department of Justice is seeking more than $4bn from Binance to settle a criminal investigation that has ensnared the world’s biggest cryptocurrency exchange and its co-founder.
The proposed deal between Binance and the DoJ would bring to an end a multiyear investigation by prosecutors that has focused on bank fraud, sanctions violations and money laundering, said a person familiar with the matter.
Under the potential agreement, which was first reported by Bloomberg, Binance co-founder and chief executive Changpeng Zhao may also face criminal charges, the person added.
The justice department declined to comment. A spokesperson for Binance did not respond to repeated requests for comment.
The agreement would mark one of the most high-profile DoJ settlements in the crypto industry, and comes at a time when Washington has increased its scrutiny of misconduct in the digital asset sector amid claims of links to terrorism financing.
Following Hamas’s attack on Israel on October 7, the Jewish state closed more than 100 Binance accounts, and requested information on up to 200 additional accounts, most of which were held on Binance, the Financial Times reported.
Last month US senator Cynthia Lummis also called on the DoJ to “reach a charging decision” on Binance.
The top US cryptocurrency enforcement tsar this year warned in the FT of an impending crackdown on digital platforms. The DoJ was focusing on companies that either committed crimes themselves or allowed them to happen — such as enabling money laundering — said Eun Young Choi, the then director of the agency’s national cryptocurrency enforcement team. Choi is now in a new role at the justice department.
The deal would also mark a significant step up in the scrutiny facing the world’s largest cryptocurrency exchange, which has spent this year clashing with several other major US agencies.
In March, the Commodity Futures Trading Commission sued the exchange and alleged it had illegally accessed US customers. In the regulator’s lawsuit, the CFTC alleged a Binance executive had said in 2020 that certain customers were “here for crime”. A colleague allegedly replied: “We see the bad, but we close two eyes.”
Meanwhile, the Securities and Exchange Commission in June filed 13 civil charges of its own against several Binance-related entities and Zhao.
SEC chair Gary Gensler at the time accused Binance of engaging in an “extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law”. The financial markets watchdog chief also alleged Binance mixed billions of dollars of customer cash with a separate trading firm also controlled by Zhao.
Binance has said it intends to fight both lawsuits.