Binance ‘Likely’ to Pay Fines in US Over Regulatory Probes: WSJ

The world’s largest crypto exchange has been under investigation from several major US regulators relating to its US affiliate, Binance.US

article-image

Source: Shutterstock / salarko, modified by Blockworks

share

Binance is expecting to pay fines related to its business in the US following investigations by regulators over affiliations with two trading firms and its CEO Changpeng Zhao.

A Securities and Exchange Commission probe is seeking to determine the relationship between Zhao, Sigma Chain AG and Merit Peak — two market makers acting on behalf of Binance’s US affiliate. 

Speaking with the Wall Street Journal on Wednesday, Binance’s chief strategy officer, Patrick Hillmann, said the exchange is working with regulators to determine the appropriate remedial measures necessary to make amends.

The outcome of these discussions will “likely” result in a financial penalty, with the possibility of further action to be determined by the regulatory authorities, Hillman said, without expanding on the size of the potential penalties.

As a key focus area, regulators are scrutinizing Binance.US over its disclosure to clients with regard to its connection to the firms, according to a separate WSJ report on Wednesday.

A spokesperson for the exchange declined to comment on its conversations with regulators.

The Justice Department has also been investigating Binance over possible violations of the US’ Bank Secrecy Act since at least September of last year.

The department’s money laundering unit previously requested the exchange provide communications from Zhao and other top executives resulting from issues including identifying illicit transactions and attracting US-based customers.

The Commodity and Futures Trading Commission (CFTC) too has been probing Binance’s global exchange over allegedly allowing US nationals to trade on its platform since March 2021.

Hillman, pointing to recent regulatory actions in the US, said the current climate surrounding digital assets remains “confusing” though he said he feels confident about where the discussions with regulators are headed.

Last week, the SEC hit Kraken with two charges related to its staking products, with the exchange agreeing to settle for $30 million.

The move immediately drew condemnation from the community, including SEC Commissioner Hester Peirce, who’ve long called out the agency’s attempts to bypass Congress as “regulation by enforcement.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

hivemapper.jpeg

Research

We believe crypto market participants overlook Hivemapper’s fundamental potential due to a poor understanding of both the niche map data market and Hivemapper’s positioning relative to incumbents. Hivemapper’s token model catalyzes both a cost and product advantage via unmatched map freshness and near real-time accuracy, which is its wedge into a market characterized by stale data and high data collection costs. Its current and potential future product suite may represent one of the strongest possibilities for PMF in crypto today.

article-image

👨‍⚖️ SBF’s courtroom sequel: Plus, Coinbase’s legal loss was DeFi’s gain

article-image

Public mining companies have been acquiring sites, refreshing machine fleets and diversifying business models in preparation for the event

article-image

Exploit shows centralization can sometimes be an asset

article-image

The Fidelity Ethereum Fund, like other proposed ETH ETFs, seeks to stake a portion of its assets, according to the firm’s Wednesday registration statement

article-image

The DAO first voted on enabling SAFE transfers over a year ago