US Justice Dept Mulling Criminal Charges Against Binance Founder CZ: Report

U.S. Department of Justice prosecutors are considering filing criminal charges against crypto exchange Binance, and individual executives including CEO and founder Changpeng "CZ" Zhao, according to Reuters.

Prosecutors are divided on whether to move aggressively against the exchange or take time to review more evidence, Reuters reported, citing four sources familiar with the matter.

The potential charges relate to an investigation launched in 2018 and focused on Binance's compliance with anti-money laundering laws and sanctions. Prosecutors at three Justice Department offices are reportedly involved; the Money Laundering and Asset Recovery Section (MLARS), the U.S. Attorney’s Office for the Western District of Washington in Seattle and the National Cryptocurrency Enforcement Team.

Binance's defense attorneys have held meetings with DOJ officials including potential plea deals, per Reuters, with Binance reportedly arguing that a criminal prosecution would have negative effects on a crypto market already reeling from the aftershocks of Terra and FTX's collapses.

In a statement shared on Twitter, Binance claimed that "Reuters has it wrong again," and that "We don't have any insight into the inner workings of the US Justice Department, nor would it be appropriate for us to comment if we did."

In a statement to Decrypt, a Binance spokesperson said that, "As has been reported widely, regulators are doing a sweeping review of every crypto company against many of the same issues. This nascent industry has grown quickly and Binance has shown its commitment to security and compliance through large investments in our team as well as the tools and technology we use to detect and deter illicit activity."

Binance faces investigations

In 2021, a Bloomberg report revealed that Binance was under investigation by the DOJ and IRS, with officials who typically handle money laundering and tax offences reportedly involved in the investigation; it's unclear whether Reuters' report refers to the same investigation.

Binance Under Investigation by DOJ and IRS: Report

Binance, the world's largest cryptocurrency exchange by trading volume, is under investigation by the Department of Justice and Internal Revenue Service, according to Bloomberg. The exact subject of the investigation hasn't been confirmed, but officials who typically handle money laundering and tax offenses are reportedly involved. The IRS probe is not only targeting Binance users but potentially employees of the company as well, according to Bloomberg's sources. Binance has been dogged by regul...

At the time, Binance issued a statement on Twitter asserting that, "We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion," adding that it has "worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity."