Binance prepared for penalties to end US investigations, details inside

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  • Lead­ing cryp­to exchange Binance is prepar­ing to face penal­ties to resolve inves­ti­ga­tions in the U.S.
  • Sources believe that resolv­ing issues with U.S. reg­u­la­tors would be ben­e­fi­cial to the future of the exchange.

Lead­ing cryp­to exchange Binance is prepar­ing to face penal­ties in order to resolve out­stand­ing reg­u­la­to­ry and law enforce­ment inves­ti­ga­tions in the Unit­ed States.

On 15 Feb­ru­ary, the Wash­ing­ton Post report­ed that Binance has been work­ing with reg­u­la­tors to resolve pre­vi­ous com­pli­ance issues, cit­ing the firm’s chief strat­e­gy offi­cer, Patrick Hill­mann. He also stat­ed that, most like­ly, the out­come of ongo­ing inves­ti­ga­tions will be penal­ties. How­ev­er, that would be up to the regulators.

Hill­mann added that Binance felt con­fi­dent about the direc­tion of the dis­cus­sions. Even then, he couldn’t pro­vide a fig­ure for the fines or a time­frame for res­o­lu­tion. He affirmed that the lack of clar­i­ty for cryp­to in the US made it a con­fus­ing time for the exchange.

Over the years, sev­er­al reg­u­la­to­ry bod­ies in the U.S. have inves­ti­gat­ed Binance.

In 2018, the Depart­ment of Jus­tice (DoJ) launched an inves­ti­ga­tion into poten­tial vio­la­tions of anti-mon­ey-laun­der­ing laws by Binance.

In March 2021, the Com­mod­i­ty Futures Trad­ing Com­mis­sion (CFTC) also inves­ti­gat­ed whether the com­pa­ny offered cryp­to deriv­a­tives to US cus­tomers with­out first reg­is­ter­ing with the body.

The Secu­ri­ties and Exchange Com­mis­sion (SEC) also launched an inves­ti­ga­tion into Binance’s US divi­sion in Feb­ru­ary last year, focus­ing on trad­ing firms linked to CEO Chang­peng Zhao.

Another flash point in the “war on crypto”?

Recent­ly, the SEC esca­lat­ed what indus­try refers to as a “war on cryp­to.” It appears to tar­get cer­tain stak­ing ser­vices and sta­ble­coins that the reg­u­la­to­ry body has deemed to vio­late secu­ri­ties laws.

Notably, Pax­os was barred from issu­ing more of the Binance sta­ble­coin, BUSD, by the New York Depart­ment of Finan­cial Ser­vices (NYDFS).

Fol­low­ing SEC’s enforce­ment action, U.S. cryp­to exchange Krak­en was fined $30 mil­lion and ordered to halt its stak­ing ser­vices last week.

In response to recent enforce­ment activ­i­ty, the Binance exec­u­tive stat­ed that it would have a sig­nif­i­cant and long-term impact in the Unit­ed States. He did, how­ev­er, con­clude that resolv­ing issues with US reg­u­la­tors would be ben­e­fi­cial to the future of Binance.

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