The U.S. Justice Department is in negotiations with Binance Holdings Ltd., seeking a resolution to a lengthy investigation into the cryptocurrency exchange.
The proposed settlement includes the possibility of Binance founder Changpeng Zhao, known as “CZ,” facing criminal charges in the U.S.
The Justice Department’s demands exceed $4 billion, making it one of the largest penalties in a criminal cryptocurrency case.
While the exact charges and structure of the resolution remain unclear, sources suggest that Binance may be expected to pay over $4 billion.
The investigation covers alleged money laundering, bank fraud, and sanctions violations. BNB cryptocurrency, native to Binance, experienced an 8.5% surge to $266.42 following reports of the ongoing negotiations.
Matt Walsh, founding partner at crypto venture firm Castle Island Ventures, highlighted the potential for a settlement with monitoring provisions, allowing Binance to pursue a more compliant future.
The agreement aims to strike a balance, ensuring Binance’s continued operation to prevent negative consequences for markets and crypto holders.
Binance, facing legal and regulatory actions, has sought to minimize its exposure in any settlement, including pushing for a deferred prosecution agreement.
Such an agreement would involve filing a criminal complaint against the company, with the U.S. withholding prosecution under specified conditions.
The investigation covers allegations of aiding in sanctions evasion against Iran and Russia and scrutiny regarding transactions possibly financing Hamas.
While the Justice Department has pushed for a broad leadership change at Binance, it remains unclear if charges would extend beyond CZ. The potential resolution follows increased legal scrutiny and regulatory actions against Binance, including a lawsuit from the Securities and Exchange Commission in June.
The crypto community watches closely as one of the largest investigations into a cryptocurrency company unfolds, awaiting further developments in this high-stakes negotiation.