The U.S. Justice Department (DOJ) is seeking over $4 billion from leading cryptocurrency exchange Binance to resolve a long-running investigation, according to sources familiar with the negotiations. The probe centers around allegations of money laundering, bank fraud, and sanctions violations.
As of November 21, the Department of Justice is due to give a press conference today at 15:00 ET, regarding a deal with the crypto exchange, according to Bloomberg .
As part of a proposed agreement, Binance founder Changpeng Zhao (or ‘CZ’) could also face criminal charges in the United States. Zhao currently resides in the United Arab Emirates, which does not have an extradition treaty with the U.S.
A settlement could come before the end of November, though talks remain fluid, according to sources. The DOJ aims to strike a balance allowing Binance to keep operating while extracting substantial penalties. However, some have questioned whether opaque Binance actually has funds to pay a multi-billion dollar fine.
Binance has confronted actions from various U.S. agencies this year and has historically been tight-lipped about key details about the company. According to a leaked US government report , Binance has allegedly sought to hide its ownership structure and primary jurisdiction in order to intentionally deceive regulators.
Precisely who controls what is unclear. Last year, Bloomberg revealed Changpeng Zhao owned 90% of Binance “based on his public statements and filings in regions where ownership is publicly disclosed.” But ownership seems distributed across a complex web of entities. Major holdings sit in secretive offshore jurisdictions such as the Seychelles, Cayman Islands and British Virgin Islands.
Add to that lack of transparency a mass exodus of staff. At least 16 have left the company since 2021, prompting fears of an impending catastrophic implosion at the exchange. Those leaving have largely been tight-lipped about any potential trouble behind-the-scenes, with many praising the company and their time there.
According to Bloomberg, CZ’s wealth has also taken a hit this year. But the company’s opacity means it is near impossible to gauge the financial health of the business as a whole.
For now, we wait to see if the DOJ and Binance can reach a deal, and whether Binance will admit wrongdoing. Binance and Changpeng Zhao have continuously denied all wrongdoing up until this point.