Regulatory troubles for Binance are far from over. The exchange is now under scrutiny from the Department of Justice. DOJ officials are currently conducting research on the trading platform and directed the firm to supply access to documents, resources, and records to US investigators upon request.
The compliance contract with the Department of Justice was publicized on 8th December. These details highlighted omissions in the investigation and regulatory proceedings regarding the operation and business activities of the firm.
The recommendation has directed the firm to share information such as particulars about employees, intermediaries, representatives, licenses, contractors, consultants, joint venture partners, and distributors, etc.
The criminal division of DOJ has invoked various sections to monitor the activities of the trading platform. Some of these provisions are associated with screening for money laundering, national security, asset recovery, and national security.
At the same time, the regulatory agency is also investigating areas such as counterintelligence and export limitations in association with the Western District of Washington’s United States Attorney.
A plea deal between Binance and the US government has added a 5-year screening period from FinCEN. As per Stark, the screening process will add millions of dollars to the operating costs of the trading platform.
Complicated Binance Settlement Process
The former regulatory agency official further noted that the settlement deal of Binance is not complete matter. The deal entails years of investigation, regulatory reporting, audits, inspection from regulators, and interference of FinCEN and DOJ officials at regular intervals.
Therefore, the process can open the firm and its active consumer base to 24/7, 365 day financial scrutiny. Former Binance CEO pleaded guilty to money laundering and terror financial violations. At the same time, the firm also signed a $4.3 billion penalty agreement on 21st November.
Meanwhile, there is an ongoing lawsuit against Binance initiated from SEC. On this account, SEC officials are to take reference from the unsealed court records from DOJ case to use against the defendants.
SEC pressed 13 additional charges against Binance on 5th June. One of the charges against the firm includes allegations such as unregistered security offerings in the form of BNB and BUSD. SEC has also included BNB Vault products, Simple Earn, and staking program in its lawsuit against the trading platform.
At the same time, Sec officials have also purported that Binance did not acquire registration as an exchange platform and broker-dealer clearing agency. The most recent filing against the trading platform requested the court to take judicial notice of details provided in the settlement case of the Binance exchange.
As per Stark, a judicial notice will enable the court to qualify presented evidence as truth without a formal presentation.
SEC to Challenge Dismissal Motion Against Binance
SEC officials have challenged the dismissal motion against Binance using information from the settlement contract with DOJ.
The regulatory agency also dismisses the arguments from the defense regarding presence and conducting business in the region during the last few years. The trading platform catered to 3 million consumer base in March 2018 as per DOJ settlement.
At the same time, 30% of online traffic on the Binance website was generated from the United States since June 2019. In a recent interview, new Binance CEO Richard Teng said that the firm is working in tandem with the regulators to carry forward the operations and ensure continued development.