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According to sources reached by COINOTAG, officials from the US Department of Justice are considering accusing cryptocurrency exchange Binance of fraud.
The Justice Department’s Move Against Binance Shakes the Market
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According to information received by COINOTAG, officials from the United States Department of Justice are considering fraud charges against cryptocurrency exchange Binance, but they are concerned about the cost to consumers.
US DEPARTMENT OF JUSTICE OFFICIALS ARE EVALUATING FRAUD CHARGES AGAINST #BINANCE EXCHANGE
— COINOTAG (@coinotag) August 2, 2023
Federal prosecutors are concerned that accusing Binance could lead to a collapse similar to the one experienced by FTX, resulting in consumers losing their money and potentially causing a panic in the crypto market.
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Prosecutors are considering penalties and other options such as deferred prosecution or non-prosecution agreements. This solution would hold Binance accountable for the alleged wrongful behavior while minimizing consumer harm.
This debate highlights the complex and rapidly changing nature of crypto applications and regulations in the United States, where companies operate in a legal gray area and consumers lack protections afforded by traditional banking systems.
But that’s not the only problem for the exchange…
Binance and its founder Changpeng Zhao are already facing charges brought by the US Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission is also involved in these allegations. The SEC’s complaint accuses Zhao and the company of operating an unregistered exchange in the US and knowingly allowing its citizens to participate in Binance’s overseas exchange.
The SEC also alleged that Binance used Sigma Chain, a secret market-making firm, to manipulate transactions on its US platform. Legal experts have said that the seriousness of the charges makes the SEC’s case appear like a criminal prosecution, increasing the likelihood of further charges following the initial allegations.
It is unusual for the SEC to file a civil lawsuit before federal prosecutors in high-profile cases. The agency typically works to bring civil and criminal cases simultaneously with the Department of Justice.