Discussion underway between Binance and DOJ regarding the elimination of supervision in $4.3 billion settlement agreement
In a potential shift in the regulatory environment for cryptocurrencies, the world's largest cryptocurrency exchange, Binance, is in discussions with the U.S. Justice Department to potentially remove the independent compliance monitor required under its $4.3 billion settlement for anti-money laundering violations. The discussions, based on a report by Bloomberg, come amidst the crypto industry benefiting from Trump's pro-digital asset policies. The administration has appointed crypto-friendly agency heads and issued executive orders addressing industry priorities like banking access. Binance, under the three-year monitoring requirement since the 2023 settlement resolving allegations that it failed to prevent money laundering on its platform, is also required to maintain a separate monitor under an agreement with the Treasury Department's Financial Crimes Enforcement Network (FinCEN). The potential deal would require Binance to adopt enhanced compliance reporting requirements in place of the independent monitor. This move, if successful, would mark a departure from the administration's previous stance, which saw the DOJ terminate monitors at three companies that received them during the Biden administration. The decision to review Binance's monitoring requirement was made by US judicial authorities or regulators involved in investigating Binance's money laundering violations. Among the companies whose monitors were terminated are units of Glencore, NatWest Group, and navy shipbuilder Austal USA. However, the FinCEN monitor remains in place, and the Treasury Department has not indicated it will remove that oversight requirement. Changpeng Zhao, founder of Binance, served a four-month sentence as part of the DOJ settlement. Zhao has indicated he would seek a presidential pardon from Trump, further underscoring Binance's growing ties to the Trump administration. The exchange played a role in developing the stablecoin for World Liberty Financial, one of Trump's family ventures. The SEC's actions towards crypto companies also indicate a more lenient regulatory stance under the Trump administration. The SEC has dropped or paused multiple investigations against crypto companies, including cases involving Binance. Matthew Galeotti, head of the DOJ's Criminal Division, has stated that while monitors can reduce repeat offenses, they 'can also impose substantial expense and interfere with lawful business operations.' The Justice Department has not made a final decision on the matter. The discussions reflect a broader shift under the Trump administration away from corporate monitors, a move that could signal a more business-friendly approach to regulating the crypto industry. However, the future of Binance's monitoring requirements remains uncertain, with the final decision yet to be made.
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