US DOJ Deliberates Binance Fraud Charges

US DoJ closes in on a verdict against Binance but treads the water carefully — their ruling may have undesirable effect on crypto and the economy. Read on.

US Department of Justice Deliberates Fraud Charges Against Binance Amid Concerns of Potential Exchange Run

Regulators Weigh Alternatives to Criminal Charges to Mitigate Impact on Consumers

United States Department of Justice (DoJ) is contemplating fraud charges against cryptocurrency exchange giant Binance. However, officials are reportedly cautious about the potential consequences of such an indictment, fearing it could trigger a run on the exchange, similar to the events that unfolded with FTX in November 2022.

DOJ Still in Limbo

The DoJ is carefully weighing its options and is said to be considering alternatives such as imposing fines or reaching non-prosecution agreements with Binance. The primary aim is to minimize potential harm to consumers and avoid a scenario where investors rush to withdraw their funds en masse.

This development comes amidst an ongoing criminal probe against Binance in the US over alleged violations of the country’s sanctions on Russia. The exchange has also faced legal troubles from other regulatory authorities.

It can be recalled that the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance in June for allegedly offering unregistered securities and operating illegally. Furthermore, the Commodity Futures Trading Commission (CFTC) targeted Binance and its CEO, Changpeng “CZ” Zhao, in March for alleged violations of trading and derivatives regulations.

Implications Remain Unclear

The implications of pressing criminal charges against Binance or CZ remain uncertain. The news follows the recent fraud charges filed against former FTX CEO, Sam Bankman-Fried, and former Celsius Network CEO, Alex Mashinsky, over alleged illegal activities at their respective companies.

As of the time of publication, no criminal charges have been filed against Binance or its US-based arm, Binance.US. Despite this, market sentiment appears to be sensitive

BNB, the native token of Binance, experienced a swift 2.5% drop to $240.42, immediately following the release of the Semafor report. Bitcoin (BTC) followed a similar pattern, slipping from $29,331 to $28,903 within an hour of the news breaking.

Growth Amidst Turmoil

Binance has been expanding its global operations. The launch of Binance Japan was just announced on August 1. However, there have been circulating reports alleging that the company conducted billions of dollars’ worth of crypto-related business in China and also considered shutting down Binance.

Binance has denied the China-related reports and has chosen not to comment on the speculation surrounding the potential closure of its US business.

Market dynamics are potentially at the mercy of any future actions taken against Binance and its executives.


Flavie Du

Flavie Du was a senior writer at BTW media focused on blockchain and fintech investment. She graduated from King’s College London.

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