![]() The complaint, citing internal texts and emails, argued that the company had allowed criminals to launder funds. lawsuit provided a wake-up call about the severity of Binance’s legal situation. Binance still sits on an estimated $66.5 billion in customer holdings, Nansen says. So far this month, nearly $1 billion has left the platform. Over seven days in late March, more than $2 billion in cryptocurrencies built on the popular Ethereum network was withdrawn from the exchange, according to the crypto data tracker Nansen. Some of Binance’s customers appear spooked. (The spokesman said Binance had engaged new audit firms but declined to identify them.) ![]() Binance also lost its outside auditing firm, Mazars, last year after the company said it was pausing work for crypto clients. operation recently lost a major banking partner, Signature Bank, when the embattled lender went out of business last month. The increasing pressure on Binance has already sent tremors through the crypto market. Representatives for the Justice Department, the C.F.T.C. lawsuit “unexpected and disappointing,” describing it as an “incomplete recitation of facts.” A company spokesman declined to comment on the other investigations. arm has formed a political action committee to push its agenda in Washington. Binance executives are meeting with reporters to trumpet the company’s compliance efforts, and the exchange’s U.S. Zhao, 46, has responded by hiring compliance officials with government credentials and pledging to help law enforcement agencies stop crypto crimes. “It’s hard to see the rest of the crypto industry remaining unscathed.” “It’s the biggest exchange for crypto, and if it gets clamped down on, that’s going to be a big deal,” said Hilary Allen, a crypto expert at American University. ![]() Binance is several times larger than FTX was, processing tens of billions of dollars in trades every day. Zhao or his company could set off mass panic in the crypto markets, which are reeling from the FTX exchange’s collapse last year and the arrest of the firm’s founder, Sam Bankman-Fried. The legal threats have converged to create the most precarious moment in Binance’s history. Zhao, accusing him of compliance failures that allowed criminals to launder money on Binance. ![]() Last month, another agency, the Commodity Futures Trading Commission, sued Mr. Justice Department prosecutors are investigating the exchange for money laundering violations, as the Securities and Exchange Commission is looking into the company’s business practices. Now the world’s largest crypto exchange is facing mounting legal pressure.Ĭhangpeng Zhao, Binance’s founder and chief executive, has hired white-collar defense lawyers at the law firm Latham & Watkins to represent him personally, as he and his company face a tightening legal net. For years, the giant cryptocurrency exchange Binance has had a reputation for dodging regulators and skirting financial rules, all without significant consequences. ![]()
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