On December 8, the United States Department of Justice (DOJ) unsealed Binance’s compliance commitments, shedding light on a significant level of government oversight of the cryptocurrency exchange’s operations and business dealings.
In a recent analysis posted on X (formerly Twitter), John Reed Stark, a former Securities and Exchange Commission (SEC) official, described Binance’s new compliance commitments as an “exhaustive list” that resembles a “consulting firm’s wish list,” and he suggested that these commitments could potentially lead to the platform’s shutdown.
These obligations are outlined in an 11-page document and entail full cooperation with authorities, granting them access to documents, records, and resources upon request.
This access extends to information related to Binance’s past employees, agents, intermediaries, consultants, representatives, distributors, licenses, contractors, suppliers, and joint venture partners, as noted by Stark.
Various sections of the DOJ’s criminal division will closely monitor Binance’s activities, including those related to money laundering and asset recovery, national security, counterintelligence and export control, as well as the office of the United States Attorney for the Western District of Washington.
As previously disclosed, Binance’s plea deal with the U.S. government includes a five-year oversight period by the Financial Crimes Enforcement Network (FinCEN).
This unprecedented level of oversight is expected to come with a substantial financial cost for the exchange.
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Stark commented, “Binance’s settlement requires it to offer years of instantaneous access, audit, examination, and inspection to DOJ, FinCEN, and all types of financial regulators and law enforcement, exposing the company — and its customers — to a 24/7, 365-days-a-year financial colonoscopy.”
Binance and its former CEO, Changpeng “CZ” Zhao, have already admitted to violating U.S. laws related to money laundering and terror financing, agreeing to pay $4.3 billion in fines on November 21.
These newly unsealed court records are part of a recent filing by the U.S. SEC, which incorporates the DOJ’s enforcement actions and settlements to strengthen its case against Binance and Zhao.
The SEC had initially filed 13 charges against Binance on June 5, accusing the exchange of unregistered offers and sales of various tokens and products.
The SEC also alleges that Binance failed to register its Binance.com platform as an exchange or broker-dealer clearing agency.
With this latest filing, the regulator is seeking judicial notice of the facts presented in Binance’s settlement, essentially asking the court to acknowledge these facts as true without formal evidence presentation.
The SEC is leveraging the settlement to challenge Binance’s motion to dismiss the case, thereby undermining the exchange’s arguments regarding its presence and operations in the U.S. over the past years.
According to Binance’s settlement with the DOJ, the exchange had over three million U.S. customers by March 2018, with approximately 30% of its web traffic originating from the United States as of June 2019.
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