DoJ Seeks $4 Billion from Binance; CEO Zhao Might Face Criminal Charges

The US Justice Department is seeking over $4 billion from Binance Holdings as a part of a proposed resolution of an ongoing investigation against the crypto exchange for over a year, Bloomberg News reported. However, there is no official confirmation yet.

According to the media report, the Justice Department and Binance are already negotiating, including possible criminal charges against Binance's CEO, Changpeng Zhao, in the United States. Zhao is currently residing in the United Arab Emirates, a country without any extradition treaty with the US.

A Settlement to End the Criminal Probe

The hefty penalty and indictment of Zhao would conclude the investigation against the crypto exchange giant. Although not official, the scope of the investigation against Binance includes alleged money laundering, bank fraud, and sanctions violations.

However, the report outlined that Binance is pushing for a deferred prosecution agreement and seeking to minimize its exposure in the settlement. In case of an agreement for a deferred prosecution agreement, the Justice Department would file a criminal complaint against the exchange, but the prosecutors would not move forward on those charges.

Binance Dominates despite the Legal Troubles

Binance is the largest cryptocurrency exchange in terms of trading volume. However, the dominance of the exchange has attracted regulatory attention to its operations. The exchange and its CEO are already facing civil charges from the two US financial market regulators.

The interest of the US Justice Department in Binance is not new. Although there were no official charges, the federal prosecutors are reported to have been investigating the crypto exchange since 2018, according to Reuters. In 2020, the prosecutors have also sought internal records from Binance about its anti-money laundering efforts.

The talks of the settlement with Binance and criminal charges against its CEO surfaced only a few weeks after the infamous Sam Bankman-Fried, the Founder and former CEO of now-collapsed FTX, was found guilty of seven counts of fraud, conspiracy, and money laundering charges. He is now looking at a maximum prison time of 115 years.

The US securities market regulator recently filed a lawsuit against Kraken, a major crypto exchange in the US. The charges against it include operating an illegal securities trading platform and commingling customer funds with the company’s.