Binance Might Face This Certain Double Whammy

Binance could be in double trouble after the U.S. Department of Justice weighs fraud charges against the crypto exchange amid fears of inciting a bank run. As first reported by Semafor, federal investigators are concerned about an FTX-like situation where panic-stricken investors incurred huge financial losses last year. Other alternatives being considered by the prosecution include fines and deferred or non-prosecution agreements.

According to those with knowledge of the situation, the outcome would result in holding the CZ-led trading platform accountable for alleged criminal activities while minimizing customer harm. This could be a tightrope for the DOJ since it underscores the complex and ever-changing nature of crypto enforcement and regulation in the United States, where businesses operate in a legal gray area and customers are not covered by the standard banking system’s consumer safeguards, Semafor added.

At the time of writing this post, neither the DOJ nor Binance had sent out any official statements in response to the news. It is worthwhile to note that the leading exchange, which has so far been able to withstand the regulatory maelstrom, got hit by 13 charges by the SEC in June, sending shockwaves across the space.

Binance Came Closer To Shutting Down Its US Operation

Some of these accusations were that the firm did not register as a broker-dealer or an exchange, that its funds were unlawfully mixed, and that it lacked essential internal controls over its operations.

The exchange is at a pivotal point right now as it considers closing its U.S. division to protect its broad interests. According to an unnamed person with knowledge of the situation, the board of directors at Binance.US, the company’s U.S. affiliate, met to discuss a proposal to liquidate the business.

As reported by TronWeekly, the move encountered a roadblock as CEO Brian Shroder, who heads Binance.US, prevented the unanimous agreement required for the dissolution. It’s important to note that CZ himself chairs the Binance.US board of directors.

However, Zhao recently reacted to the news by saying that in a so-called board vote, 1 vote out of 3 won’t stop anything. The 2/3 wins. “If it is a board vote, 1 vote holding out of 3 won’t stop anything. The 2/3 wins. If it is a shareholder vote, Brian S. is a CEO, not a VC or any other type of investor. It’s just FUD.”

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