Feb 16, 2023

Binance to Face Fines for U.S. Investigations

The world’s largest digital asset exchange, Binance, is in the process of settling outstanding regulatory and law-enforcement investigations in the United States that could result in fines and penalties.

According to Patrick Hillmann, the firm’s chief strategy officer, Binance is “working with regulators to figure out what are the remediations we have to go through now to make amends for that.” He added that the outcome of the ongoing investigations could range from fines to more serious penalties, which are ultimately up to regulators to decide.

The Department of Justice began investigating Binance in 2018 over possible violations of anti-money-laundering laws. The Commodity Futures Trading Commission also probed whether the company offered crypto derivatives to U.S. customers without registering with the agency. Last February, the Securities and Exchange Commission launched a probe into Binance’s U.S. division regarding trading firms connected to CEO Changpeng Zhao.

Hillmann said Binance is “highly confident and feeling really good about where those discussions are going,” but was unable to provide any estimates on the size of the potential fines or a timeline for resolution. He noted that the lack of clarity in the U.S. crypto space has made it a “very confusing time” for the firm.

The SEC has recently intensified its enforcement activities, with some industry observers calling it a “war on crypto” that targets staking services and stablecoins it deems as securities. New York regulators recently cracked down on Paxos, preventing it from issuing more of the Binance-branded stablecoin BUSD. Last week, U.S. crypto exchange Kraken was hit with a $30 million fine and ordered to halt its staking services following SEC enforcement action.

Hillmann believes resolving the issues with U.S. regulators will be a major benefit for the company. “It will be a good moment for our company because it allows us to put it behind us,” he said.

The digital asset exchange is also turning to NFTs and promotion as part of their expansion into the web3 space. Binance is actively exploring NFT marketing and has even hired a web3 agency to help them with selling NFTs. They are also leveraging Twitter NFT marketing to promote their offerings.

Binance declined to offer any additional comments on the matter.

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