According to an Aug. 2 report from Semafor, insiders have revealed that the United States Department of Justice is contemplating the possibility of charging cryptocurrency exchange Binance with fraud. However, they seem to be hesitant due to concerns that such an indictment could trigger a similar run on the exchange, as seen with FTX in November 2022.
In order to mitigate potential harm to consumers, Justice Department officials are reportedly exploring alternatives to criminal charges, such as imposing fines or reaching non-prosecution agreements with Binance.
It's worth noting that Binance was already the subject of a criminal investigation in the U.S., relating to alleged violations of sanctions on Russia. In addition to this, the U.S. Securities and Exchange Commission had filed a lawsuit against the exchange in June, accusing them of offering unregistered securities and operating illegally. Moreover, the Commodity Futures Trading Commission targeted both the exchange and its CEO, Changpeng "CZ" Zhao, in March for alleged violations of trading and derivatives regulations.
The potential implications of filing criminal charges against Binance or its CEO in the U.S. are uncertain, and it remains to be seen how it would impact the broader crypto space. Interestingly, former FTX CEO Sam Bankman-Fried and former Celsius Network CEO Alex Mashinsky are already facing fraud charges for their alleged illegal actions at their respective companies.
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