(Bloomberg) — The U.S. Justice Department is seeking more than $4 billion from Binance Holdings Ltd. as part of a proposed resolution of a years-long investigation into the world’s largest cryptocurrency exchange.
Negotiations between the Justice Department and Binance include the possibility of its founder Changpeng Zhao facing criminal charges in the US under a deal to resolve the investigation into alleged money laundering, bank fraud and sanctions violations, according to people familiar with the discussions.
Zhao, also known as “CZ,” resides in the United Arab Emirates, which does not have an extradition treaty with the United States, but that does not prevent him from going voluntarily.
Binance did not respond to multiple emails and phone calls seeking comment, while the Department of Justice declined to comment.
An announcement could come at the end of the month, although the situation remains fluid, according to the sources, who asked not to be identified discussing a confidential matter.
The BNB cryptocurrency, a native token of Binance and the BNB Chain blockchain that was created by the exchange, rose as much as 8.5% to $266.42 after Bloomberg reported on the talks.
“A deal with a monitoring clause could be an arrangement that protects investors and allows Binance the option to evolve towards a more institutional and compliant future direction,” said Matt Walsh, founding partner at crypto venture firm Castle Island Ventures. .
The exact timing and structure of the proposed resolution and specific charges are unclear. However, Binance will likely have to pay more than $4 billion, which would be one of the largest penalties ever imposed in a cryptocurrency criminal case.
The investigation is being led by the criminal division’s money laundering and asset recovery section, along with the national security division and the U.S. Attorney’s Office in Seattle.
Strike a balance
The deal seeks to strike a balance that allows Binance to continue operating, rather than risk a collapse that could cause negative consequences for markets and cryptocurrency holders, three of the people said.
Binance has tried to minimize its exposure in any settlement, including pushing for a deferred prosecution agreement, another person said.
If Binance and the Department of Justice reach a deferred prosecution agreement, the Department of Justice would file a criminal complaint against the company. The U.S. would not pursue prosecution as long as the company complies with prescribed conditions, which typically include paying a substantial fine and agreeing to a detailed statement of facts outlining its wrongdoing. A process would be established to monitor the company’s compliance.
Regarding potential sanctions violations, the Justice Department has been investigating Binance for its alleged assistance in evading US sanctions against Iran and Russia, one of the people said. Binance has also been under scrutiny to verify whether it allowed transactions that helped fund Hamas.
Translated by Paulina Munita.
Nota Original:US Is Seeking More than $4 Billion From Binance to End Case (1)
–With contributions from Ava Benny-Morrison, Muyao Shen, David Voreacos, Michael P Regan and Hannah Miller.
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