The Financial Crimes Enforcement Network (FinCEN) will oversee Binance for five years as part of their plea agreement with the United States government, as was previously announced.
A substantial amount of government monitoring of Binance’s activities and commercial interactions was revealed when the compliance promises were unsealed on December 8 by the US Department of Justice (DOJ).
According to a recent analysis published on X (formerly Twitter), a former SEC official named John Reed Stark compared Binance’s new compliance commitments to a “consulting firm’s wish list” and made the accusation that they could result in the platform’s closure.
The 11-page paper details these responsibilities, which include cooperating fully with authorities and providing them with documents, data, and resources when they ask for them.
Activities involving Binance will be closely observed by multiple sections of the DOJ’s criminal division, including those pertaining to export control, national security, counterintelligence, money laundering, and asset recovery.
Previous reports indicated that, as part of Binance’s plea agreement with the US government, the Financial Crimes Enforcement Network (FinCEN) would oversee the cryptocurrency exchange for five years.
The exchange is anticipated to incur significant financial costs as a result of this unprecedented degree of supervision.
Stark made the following statement: “Binance’s deal forces it to give years of immediate access, audit, examination, and inspection to DOJ, FinCEN, and other forms of financial authorities and law enforcement. This exposes the firm and its clients to a 24/7, 365-day-a-year financial colonoscopy.”
Binance and its ex-CEO Changpeng “CZ” Zhao had already acknowledged breaking U.S. statutes pertaining to terrorist funding and money laundering, and on November 21st, they agreed to pay penalties totaling $4.3 billion.
Binance was first hit with thirteen allegations by the SEC on June 5, alleging that the exchange had traded in tokens without first registering them.
One other thing the SEC has said about Binance is that it should have registered its Binance.com platform as a broker-dealer clearing agency or exchange.
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