DOJ Reviews Whether Binance Breached 2023 Settlement

The U.S. Justice Department is reviewing whether Binance violated the terms of its 2023 settlement, which could lead to renewed criminal prosecution and additional fines for the cryptocurrency exchange. The review is taking place alongside a separate case seeking the forfeiture of about $61 million in cryptocurrency allegedly linked to sanctioned Iranian oil sales.

Tysen Duva, head of the Justice Department’s criminal division, confirmed the review in an interview this week. He did not disclose details or accuse Binance of breaching the agreement. The department has not made a formal finding and has not said when the review will end.

The 2023 settlement required Binance to report misconduct and maintain stronger controls against money laundering and sanctions violations. The department is examining whether the exchange complied with those requirements after the agreement took effect.

The review overlaps with a forfeiture action filed in September by the U.S. Attorney’s Office for the Southern District of New York. Prosecutors are seeking to seize cryptocurrency they allege represents proceeds from black-market sales of Iranian crude oil.

According to the complaint, two Chinese companies, Blessed Trust and Hexa Whale, used Binance trading accounts to move money connected to the oil sales. Prosecutors allege that the wider network transferred more than $1.5 billion in illicit proceeds. About $61 million is included in the forfeiture case. The allegations have not been proven in court.

Binance said it continues to strengthen its compliance controls and cooperate with law enforcement. No wrongdoing has been alleged against Binance or its employees in the current review.

If the Justice Department finds that Binance breached the settlement, it could seek to reopen the criminal case. The exchange could then face renewed prosecution and additional penalties beyond the original settlement.

In November 2023, Binance pleaded guilty to violating U.S. banking rules and agreed to pay a $4.3 billion penalty. The settlement imposed additional compliance requirements on the exchange.

Changpeng Zhao, Binance’s then-chief executive, stepped down as part of the resolution and separately pleaded guilty to violating U.S. anti-money-laundering laws. The current review concerns Binance’s compliance with the corporate settlement and does not constitute a new finding against Zhao.