Binance likely to pay penalties to settle US probes

On 15 February, the Washington Post reported that Binance has been working with regulators to resolve previous compliance issues, citing the firm’s chief strategy officer, Patrick Hillmann

Top crypto exchange Binance is preparing to face penalties in order to settle outstanding regulatory and law enforcement investigations in the US.

On 15 February, the Washington Post reported that Binance has been working with regulators to resolve earlier compliance issues, quoting the company’s CSO, Patrick Hillmann. He also said that, most likely, the result of ongoing investigations will be penalties. Though, that would be up to the regulators.

He stated that Binance felt assured about the direction of the talks. Even then, Hillmann could not provide a figure for the penalties or time duration for settlement. Hillmann stated that the lack of clarity for crypto in the United States made it a confusing time for the exchange.

Over the years, a number of regulatory bodies in the United States have probed Binance.

In 2018, the Department of Justice (DoJ) began a scrutiny into potential violations of anti-money-laundering laws by Binance.

In March 2021, the Commodity Futures Trading Commission (CFTC) also probed whether the firm offered crypto derivatives to US customers without first registering with CFTC.

The Securities and Exchange Commission (SEC) also began an investigation into Binance’s US division in February 2022, focusing on trading companies related to Chief Executive Officer Changpeng Zhao.

Lately, the Securities and Exchange Commission escalated what industry refers to as a ‘war on crypto.’ It seems to target certain staking services and stablecoins that the regulatory body has considered to breach securities laws.

Notably, Paxos was prohibited from issuing more of the Binance stablecoin, BUSD, by the New York Department of Financial Services (NYDFS).

After Securities and Exchange Commission’s enforcement action, U.S. crypto exchange Kraken was fined $30mln and ordered to stop its staking services last week.

In response to recent enforcement activity, the Binance executive said that it would have a considerable and long-term effect in the US. Nevertheless, he did conclude that settling issues with US regulators would be useful to Binance’s future.