Prosecutors from the U.S. Department of Justice are split on whether to charge the crypto exchange Binance for money laundering and sanctions violations, Reuters has found. Some of those involved believe there’s enough evidence to go after the company while others want time to review more evidence. At least six of the prosecutors involved believe there’s enough evidence to go after individuals at the company including founder Changpeng Zhao, better known as CZ.
The investigation into the exchange has been ongoing since 2018. Progress on the matter could have been slowed by the Money Laundering and Asset Recovery Section (MLARS) at the Justice Department which would have to sign off on any money laundering charges being made. Apparently, MLARS has a reputation for arriving at decisions slowly but since October has been under new leadership. The new chief, Brent Wible, is known for pursuing cases more aggressively, according to Reuters.
Sources said that Binance is under investigation for unlicensed money transmission, money laundering conspiracy, and criminal sanctions violation. Prosecutors have not yet decided whether to press charges and there are a number of ways things could play out. The Justice Department could take action against the company and its executives, it could come to a settlement, or it could shut the case without taking any action.
With FTX’s collapse earlier this year, and the subsequent price drop of Bitcoin and other cryptos, something similar could happen if action is taken against Binance. It is the largest exchange in the world so action against it could be disruptive, to say the least. The risk of contagion from FTX’s collapse also still exists so other exchanges may get knocked out too in the near future.
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