Binance’s recent agreement reveals extensive collaboration with the U.S. Department of Justice (DOJ), including granting U.S. officials access to various company records and documents.
On Dec. 8, details of Binance’s compliance agreement with the DOJ were made public, highlighting the extensive U.S. government supervision over the cryptocurrency exchange’s operations.
John Reed Stark, a former official at the Securities and Exchange Commission (SEC), discussed the agreement on X (formerly Twitter). He referred to Binance’s extensive compliance obligations as a “consulting firm’s wish list,” potentially leading to the closure of the platform.
Outlined in an 11-page document, Binance’s commitments involve extensive cooperation, including providing access to a wide range of information encompassing “former employees, agents, intermediaries, consultants, representatives, distributors, licenses, contractors, suppliers, and joint venture partners,” as pointed out by Stark.
The DOJ’s criminal division will meticulously oversee Binance’s activities, specifically the sections dealing with money laundering and asset recovery, national security, counterintelligence and export control, and the office of the Western District of Washington’s United States Attorney.
Additionally, Binance’s agreement with the U.S. government includes five years of oversight by the Financial Crimes Enforcement Network (FinCEN). This heightened scrutiny could potentially cost the exchange a substantial amount. Stark commented:
Furthermore, Binance and its former CEO, Changpeng “CZ” Zhao, have acknowledged breaches of U.S. regulations concerning money laundering and terror financing, consenting to a $4.3 billion fine on Nov 21.
The SEC is incorporating the DOJ’s enforcement actions and settlements in its ongoing legal action against Binance and Zhao. This includes the recently disclosed court records.
The SEC filed 13 charges against Binance on June 5, alleging unregistered offerings and sales of various products and tokens, and asserting that Binance failed to register its platform as an exchange or broker-dealer clearing agency.
The SEC’s latest court submission seeks a “judicial notice” of the facts in Binance’s settlement, meaning the agency is requesting that the court recognize certain facts as true without additional evidence, as Stark explained.
The SEC is leveraging the settlement details in its effort to oppose Binance’s motion to dismiss the case, challenging the exchange’s claims about its U.S. operations and presence over recent years.
According to the DOJ settlement, Binance had over three million U.S. customers by March 2018, and around 30% of its web traffic originated from the U.S. as of June 2019.