DOJ Gains Extensive Oversight Over Binance Following Settlement – Details

Recently unveiled court documents from the US Department of Justice (DOJ) reveals a significant depth of oversight by the federal regulator into the operational activities of Binance, following the $4.3 billion settlement deal between both parties last month. This development comes as the US Securities and Exchange Commission (SEC) has now begun to incorporate facts from the popular plea deal into its lawsuit against the Seychelles-based exchange.

Binance’s Compliance Commitment With DOJ, Others

In a post on X on December 9, former SEC Chief of Internet Enforcement, John Reed Stark, shared an elaborating insight on Binance’s plea deal with the DOJ. Based on the freshly released DOJ filings, Stark claimed that the US government has now acquired an “extensive, robust and vigorous oversight” over prominent crypto exchange operations.

The former SEC chief stated that such level of monitorship is unprecedented, and Binance will now be forced to implement “a non-existent level” of compliance in relation to the company’s policies, procedures, internal controls, customer and third-party relationships, etc.

Stark describes the imposed compliance demands by the DOJ as a “consulting firm’s wish list,” which may cost Binance millions of dollars in implementation. Notably, as part of the plea deal, the crypto exchange is now mandated to grant the DOJ access to its documents, records, employees and former employees, suppliers, and facilities as “reasonably requested.” 

Interestingly, alongside the DOJ, the Financial Crimes Enforcement Network (FinCEN) will also be gaining regulatory oversight over Binance, albeit this monitorship is only for a period of five years. Commenting on the compliance commitments being demanded by the FinCEN, Stark has described the oversight as being “equally extensive, forceful and titanic”  as that of the DOJ.

In his personal opinion, the former SEC chief describes Binance as a “drug cartel” and a reticent organization that cannot abruptly become transparent, open, and law-abiding. He believes the crypto exchange cannot implement this high level of governmental compliance, and it’s only a matter of time before they breach the agreement on the plea deal. 

SEC Aims To Utilize Plea Deal Admissions Against Binance

In other news, the SEC has begun to incorporate facts from Binance’s settlement deal with the DOJ as it looks to strengthen its case against the crypto exchange. In June, the securities regulator charged the trading platform with 13 offenses, including the offering of unregistered securities.  

On December 8, the SEC filed a “Notice of Supplemental Authority” with the presiding court over this case, requesting they take note of the inculpatory admissions made by Binance in its plea deal with the US Department of Justice.

Notably, the SEC highlights that the prominent exchange admitted to knowingly violating US laws by devising a strategy that allowed US customers to secretly engage the Binance.com platform. This represents one of the evidence-backed assertions the SEC will be employing to fortify its charges against the exchange.