News - Binance is threatened with indictment by U.S. Department of Justice

By Luc Vesters

Binance is threatened with indictment by U.S. Department of Justice

Scams, crime and fraud

As a report by Semafor reveals, the U.S. Department of Justice (DOJ) is currently considering suing Binance for fraud. At the same time, however, the authority is concerned that such action against the world's largest crypto exchange would lead to an FTX-like stampede.

Therefore, the potential harm to customers is causing the DOJ to now consider alternatives such as fines or non-prosecution agreements. Just moments before the announcement, Binance CEO Changpeng Zhao ("CZ") had posted the number "4" on X, repeatedly pointing out news that causes fear and doubt ("FUD"), which he believes should be ignored.

The latest news is not surprising. A few weeks ago, Forbes reported on ongoing investigations by the U.S. Department of Justice. At the same time, large parts of management had apparently left the crypto exchange. What concerns many, however, is the fact that the U.S. Department of Justice sees a run on the exchange as a threat to customers' assets. Some observers see this as a sign that assets at Binance are not covered 1:1.

In contrast, other parts of the community view DOJ's approach as merely preventative. Damage to numerous clients, as in the case of the collapse of the crypto exchange FTX, can thus be prevented. This differs, for example, from the actions of the SEC, which, with a lawsuit against Coinbase and Binance, caused massive sales of various crypto currencies and thus losses for investors, it reads.

Regardless, the world's largest crypto exchange is now under even more pressure. Obstacles of a regulatory nature had at times caused a sweeping withdrawal from Europe. Complaints from the SEC, CFTC and soon possibly the DOJ continue to weigh heavily.

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