Binance’s Compliance Commitment With DOJ, Others
Recently released court documents from the US Department of Justice (DOJ) reveal that there is extensive oversight by the federal regulator into Binance’s operational activities. This comes after the $4.3 billion settlement deal between Binance and the DOJ last month. The US Securities and Exchange Commission (SEC) is now incorporating facts from the plea deal into its lawsuit against the exchange.
According to former SEC Chief of Internet Enforcement, John Reed Stark, the US government now has significant oversight over crypto exchange operations. Binance will be required to implement a high level of compliance in various areas such as policies, procedures, internal controls, and customer relationships. The compliance demands are described as a “consulting firm’s wish list” and may cost Binance millions of dollars to implement.
The DOJ will have access to Binance’s documents, records, employees, suppliers, and facilities as part of the plea deal. Additionally, the Financial Crimes Enforcement Network (FinCEN) will also have regulatory oversight over Binance for a period of five years.
Stark believes that Binance cannot achieve this level of compliance and likens the exchange to a “drug cartel,” suggesting that it is only a matter of time before they breach the agreement on the plea deal.
SEC Aims To Utilize Plea Deal Admissions Against Binance
The SEC is incorporating facts from Binance’s settlement deal with the DOJ to strengthen its case against the exchange. The securities regulator charged Binance with 13 offenses, including offering unregistered securities.
The SEC filed a “Notice of Supplemental Authority” with the court presiding over the case, requesting that they take note of Binance’s admissions in its plea deal with the DOJ. One key admission is that Binance knowingly violated US laws by allowing US customers to secretly engage with its platform.
These admissions will be used as evidence to support the SEC’s charges against the exchange.
Hot Take: Binance Faces Extensive Oversight and Potential Compliance Challenges
The recent court documents and plea deal between Binance and the DOJ reveal that the exchange is now subject to significant oversight and compliance demands. The US government, through the DOJ and FinCEN, will closely monitor Binance’s operations for years to come.
Former SEC Chief John Reed Stark believes that the compliance requirements imposed on Binance are extensive and costly, questioning the exchange’s ability to fully comply. He suggests that Binance may eventually breach the plea deal agreement due to its secretive nature.
Meanwhile, the SEC aims to strengthen its case against Binance by incorporating admissions from the plea deal. These admissions highlight Binance’s violations of US laws and will serve as evidence in the securities regulator’s charges against the exchange.
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