Binance Crypto exchange expects to pay penalties to settle US investigations.
Binance, one of the world’s largest cryptocurrency exchanges, is reportedly facing multiple investigations by US authorities. According to recent reports, the company has been in talks with regulators to resolve these investigations, and it expects to pay significant penalties as part of any settlement.
The investigations are said to relate to a number of issues, including whether Binance has allowed US residents to trade on its platform in violation of US securities laws. There are also concerns about the company’s compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations.
Patrick Hillmann, the chief strategy officer of Binance, told the WSJ that the company’s management was unaware of the laws and regulations pertaining to bribery, corruption, and money laundering.
Currently, Binance is “working with regulators to figure out what are the remediations we have to go through now to make amends for that,” he said. The result may range from “like a fine” to “could be more.”
Reuters reported in December that U.S. Department of Justice officials had been investigating Binance since 2018 for any gaps in compliance with U.S. anti-money laundering rules and penalties, with opinions divided on whether it was time to complete the investigation.
Binance openly refuted the allegation, claiming that Reuters was “wrong again” and “attacking our law enforcement team, a team that we’re incredibly proud of.”
Changpeng Zhao, founder, and CEO of Binance launched a Twitter campaign stating that newsrooms were “still working for” FTX founder Sam Bankman-Fried. Zhao, as usual, offered no evidence to support his allegations and asked his followers to “ignore the FUD.”
Binance’s shift in strategy comes as it becomes publicly obvious that things are not going well for the company. WSJ previously reported that the SEC has informed Paxos, which issues BUSD stablecoin for Binance, that it intends to take action against the company.
Paxos announced earlier this week that it had ceased releasing new BUSD tokens in response to a directive from the New York Department of Financial Services.
Binance has reportedly been cooperating with regulators and has made a number of changes to its business practices in recent months in an effort to address these issues. The company has said that it is committed to compliance with all applicable laws and regulations and has taken steps to strengthen its AML and KYC procedures.
However, the investigations are ongoing, and it is unclear at this point what the final outcome will be. It is possible that Binance could face substantial fines or other penalties if it is found to have violated US laws.
The news has raised concerns among cryptocurrency investors, as Binance is a major player in the industry and is widely used by traders around the world. Some have suggested that the investigations could have a broader impact on the cryptocurrency market, particularly if they result in greater regulatory scrutiny of the industry as a whole.