Binance Faces Potential $4 Billion Fine as U.S. Department of Justice Seeks Resolution

According to sources from Bloomberg, the U.S. Department of Justice (DOJ) is seeking over $4 billion from the largest cryptocurrency exchange, Binance, as part of a long-running investigation. The news triggered a sharp reaction in the BNB token price, initially dropping from $238 to $268.

People familiar with the negotiation process between the DOJ and Binance reveal that the department is considering bringing criminal charges against Binance’s CEO, Chanpeng Zhao, as part of a settlement related to allegations of money laundering, banking fraud, and sanctions violations.

Binance has not responded to numerous emails and phone calls from journalists seeking comment on the situation. The Department of Justice has declined to provide any comments.

Sources suggest that an official resolution from the DOJ could be published by the end of November. The exact terms and structure of the proposed resolution, as well as specific charges, are yet to be confirmed. It is likely that Binance will be required to pay over $4 billion, making it one of the largest fines in a cryptocurrency-related criminal case.

The investigation is being led by the Money Laundering and Asset Recovery Section of the Criminal Division, along with the National Security Division and the U.S. Attorney’s Office in Seattle. According to additional sources, the regulatory agreement between the authorities and the exchange aims to strike a compromise that allows Binance to continue operations without causing a market collapse and negative consequences for users.

One source mentioned that Binance is seeking to minimize risks in any regulatory resolution, advocating for a deferred prosecution agreement.

If Binance and the U.S. Department of Justice agree to a deferred prosecution, the department will file a criminal complaint against the company. The U.S. will refrain from pursuing criminal charges as long as the company complies with the specified conditions, usually including a substantial fine and an agreement to provide detailed facts confirming its wrongdoing. A monitoring process will be established to ensure the company’s compliance with the set requirements.

According to one of Bloomberg’s informants, the Department of Justice is also investigating Binance for alleged assistance in circumventing U.S. sanctions against Iran and Russia. Additionally, Binance is under scrutiny for facilitating transactions that contributed to the financing of the Hamas movement.

DOJ representatives are insisting on a change in the company’s management, but it remains unclear whether charges will be brought against other Binance executives besides Zhao.