Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Binance Under DOJ Microsope and Unprecedented Monitorship
Enforcement | Dec 11, 2023
Image courtesy of DALL-E
The United States Department of Justice (DOJ) unveils a 'compliance wishlist' and extensive monitorship over Binance
Unsealed on December 8, 2023, the DOJ's monitorship over Binance's operations and business activities is described in an 11-page document, which includes several stringent obligations for the crypto exchange. This development follows Binance and its former CEO, Changpeng "CZ" Zhao, admitting to violating U.S. money laundering and terror financing laws, agreeing to pay $4.3 billion in fines on November 21, 2023.
See: Ex-Binance CEO CZ Faces Up to 10 Years in Prison
These include:
- Binance must cooperate by providing U.S. authorities access to all documents, records, and resources upon request. This includes information related to its former employees, agents, intermediaries, consultants, representatives, distributors, licenses, contractors, suppliers, and joint venture partners.
- Various sections of the DOJ's criminal division will closely monitor Binance's activities. These include the section for money laundering and asset recovery, the section for national security, the section for counterintelligence and export control, and the office for the Western District of Washington’s United States Attorney.
- In addition to DOJ oversight, Binance will also be subject to five years of oversight by FinCEN.
This unprecedented level of oversight is likely to cost Binance millions of dollars. John Reed Stark, a former Securities and Exchange Commission (SEC) official, described Binance's new compliance commitments as a "consulting firm’s wish list" that could potentially shut down the platform. The SEC is also using Binance's settlement to strengthen its case against the exchange, pressing 13 charges related to unregistered offers and sales of various tokens and products.
Outlook
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