DOJ has extensive oversight over Binance after settlement. Recently released court documents from the US Department of Justice (DOJ) have shed light on the extensive oversight conducted by the federal regulator regarding Binance's operational activities. This follows the recent $4.3 billion settlement between both parties. Furthermore, the US Securities and Exchange Commission (SEC) has started incorporating information from the plea deal into its ongoing lawsuit against the Seychelles-based exchange.
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Binance’s Compliance Commitment With DOJ, Others
In a post on December 9, former SEC Chief of Internet Enforcement, John Reed Stark, provided an insightful analysis of Binance's plea deal with the DOJ. According to the recently released DOJ filings, Stark suggests that the US government now has extensive oversight over prominent crypto exchange operations.
Stark highlights that this level of monitorship is unprecedented, and Binance will be required to implement a high level of compliance in various areas such as company policies, procedures, internal controls, and customer and third-party relationships. The compliance demands imposed by the DOJ are described by Stark as resembling a "consulting firm's wish list," which could result in significant implementation costs for Binance. As part of the plea deal, Binance is obligated to grant the DOJ access to its documents, records, employees, former employees, suppliers, and facilities upon reasonable request.
Interestingly, in addition to the DOJ, the Financial Crimes Enforcement Network (FinCEN) will also have regulatory oversight over Binance, although this oversight will only last for a period of five years. Stark comments that the compliance commitments required by FinCEN are equally extensive and forceful as those of the DOJ.
Stark personally characterizes Binance as a "drug cartel" and a secretive organization that cannot easily transition to transparency, openness, and compliance with the law. He believes that Binance will struggle to meet the high level of governmental compliance required and predicts that it is only a matter of time before they violate the terms of the plea deal.
SEC Aims To Utilize Plea Deal Admissions Against Binance
In recent news, the Securities and Exchange Commission (SEC) has incorporated information from Binance's settlement deal with the Department of Justice (DOJ) to strengthen its case against the cryptocurrency exchange. In June, the SEC charged Binance with 13 offenses, including the offering of unregistered securities.
On December 8, the SEC filed a "Notice of Supplemental Authority" with the court overseeing the case, requesting that they consider the incriminating admissions made by Binance in its plea deal with the US Department of Justice. Of particular note, the SEC emphasizes that Binance acknowledged knowingly violating US laws by implementing a strategy that allowed US customers to use the Binance.com platform discreetly. This admission serves as one of the evidence-based assertions that the SEC will use to support its charges against the exchange.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.