Binance is bracing itself to pay penalties in an effort to settle US investigations as regulators sniff around the exchange’s past policy violations.
According to The Wall Street Journal report on Wednesday, February 15th, various US regulatory and law enforcement authorities have been looking into the exchange’s businesses for various policy violations.
In an interview with WSJ, Binance chief strategy officer (CTO) Patrick Hillmann said that the management is preparing to pay monetary penalties to amend the past unintentional misconduct.
CFTC and DOJ are Probing Binance
Following the FTX blow in November 2022, regulators around the globe have been on a constant look at cryptocurrency exchanges. Binance, which is currently the largest crypto trading platform, is also the subject of regulatory review.
As per the WSJ report, the US Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) have been probing Binance over its crypto offerings. According to people familiar with the matter, the DOJ is looking into Binance’s business practices over potential violations of U.S. anti-money-laundering laws.
Meanwhile, regulators at CFTC are investigating to check whether “Binance offered cryptocurrency derivatives to U.S. clients without properly registering that activity with the CFTC.”
Patrick Hillmann admitted policy violation in the past saying that Binance grew quickly and the team was not initially aware of the myriad laws and regulations designed to prevent money laundering, sanctions evasion, and corruption.
Binance CTO added that the management was working to fill gaps left unaddressed during the early days, but still expected monetary penalties and potentially more for past misconduct. The team is in constant discussion with the regulator to reach an agreement.
He has no estimate about the extent of penalties but said that
“Team is highly confident and feeling really good about where those discussions are going.”
Hillmann also expressed his confusion and concerns about the US regulators’ approach, particularly of SEC, towards the crypto sector.
As the crypto community has seen in the recent few weeks, US regulators have stepped up their enforcement activities towards crypto exchanges and products. Given the footprint of Binance in the crypto sphere, regulatory scrutiny on the exchange has intensified following its rival FTX’s collapse last November.
Reports suggest that Binance is under investigation since 2018 and the DOJ is discussing whether to file criminal charges against the exchange and its CEO CZ. The DOJ also reportedly sent at least two trading firms subpoenas in recent months, requesting records of their past dealings with Binance US. As reported, the NYDFS has recently banned Paxos to mint Binance stablecoin BUSD.
