Yet another regulator in the United States is aiming at Binance.
The US Department of Justice's contemplation of fraud charges against cryptocurrency exchange Binance is being tempered by fears of consumer backlash, similar to the run that occurred with FTX in 2022.
According to the news portal Semafor report shared on August 2nd, the US Department of Justice is seriously considering the option of imposing fines or non-prosecution agreements against Binance. Sources close to the matter shared that such measures are being weighed as alternatives to criminal charges to minimize harm to consumers.
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These considerations stem from concerns that an indictment might trigger a wave of user exits from the crypto exchange, akin to the incident involving FTX last November.
Previously, Binance had been the subject of criminal investigations in the US regarding accusations of breaching sanctions against Russia. In addition, regulatory bodies, such as the US Securities and Exchange Commission (SEC), filed a lawsuit against the crypto exchange in June. The suit alleges that Binance engaged in unlawful activities, such as offering unregistered securities.
Likewise, the Commodity Futures Trading Commission took aim at the crypto exchange and its CEO, Changpeng "CZ" Zhao, in March over alleged violations of trading and derivatives regulations.
The potential ramifications of criminal charges against Binance or CZ in the US for the wider crypto space remain murky.
The financial impact of the Semafor report was promptly felt in the cryptocurrency market. Binance's native cryptocurrency, BNB, experienced a nearly 2.5% decline in value, settling at $240.42.
It is worth noting that despite regulatory challenges, on August 1st, Binance launched its Japanese subsidiary.
The US Department of Justice's apprehension to proceed with fraud charges against Binance highlights the delicateness of the situation. While law enforcement and regulatory authorities seek to uphold legal standards and protect consumers, they must also consider the broader implications of their actions on an increasingly interconnected and sensitive cryptocurrency market.
