Recently, John Reed Stark, a former Securities and Exchange Commission (SEC) official, expressed concerns about the future of Binance. Stark points to unsealed files from the US Department of Justice (DOJ) that could signal the end of the popular cryptocurrency exchange. This development comes as the Department of Justice intensifies its investigations by mobilizing a comprehensive team to prosecute financial fraud against the Binance exchange.
Binance is under extensive oversight by the Department of Justice
SEC’s John Reed Stark’s recent social media statements shed light on an ongoing dispute between Binance and the U.S. Department of Justice (DOJ) and Financial Crimes Enforcement Network (FinCEN). Stark highlights important disclosures found in recently released DOJ files, shedding light on the extensive oversight the agency currently exercises over Binance. Specifically, the authority of the DOJ monitor tasked with overseeing Binance’s compliance will be under the oversight of various divisions within the DOJ.
Breaking News: A Binance Double Whammy. 1) Newly Unsealed US DOJ Filings Could Mean the End of Binance; and 2) SEC Files Supplemental Pleading Against Binance, Strengthening the SEC Binance Lawsuit Exponentially
There’s been a flurry of newly released Binance-related filings… pic.twitter.com/igN2I9Y7cP
— John Reed Stark (@JohnReedStark) December 9, 2023
Stark emphasizes that this surveillance involves a joint effort of the Criminal Division, the Money Laundering and Asset Recovery Sections, the Homeland Security Division, the Counterintelligence and Export Control Section, and the U.S. Attorney’s Office for the Western District of Washington. Such a coordinated approach demonstrates the Ministry of Justice’s determination to criminally prosecute financial fraud using all available means. Stark emphasizes that Binance’s response to the DOJ’s surveillance provided unrestricted access to the audience by allowing inspection of its activities, documents, and resources.
The stock market could lose millions of dollars
In addition, Binance is obligated to facilitate the observer’s interaction with various entities associated with the exchange, including former employees, representatives, consultants and joint venture partners. Additionally, Stark reveals that intensified scrutiny supports the ongoing lawsuit against Binance. The U.S. Securities and Exchange Commission (SEC) incorporated facts from the DOJ plea agreement into its enforcement action and urged the federal court to consider admissions made by Binance in the settlement.
According to Stark, the possibility of the exchange being constantly audited by both the SEC and the Department of Justice, as well as the Financial Crimes Enforcement Network (FinCEN), seems to pose an insurmountable obstacle for the cryptocurrency exchange. The compliance commitments disclosed include a comprehensive set of procedures addressing policies, internal controls, customer and third-party relationships, anti-breach controls, periodic reviews, oversight and independence, training, reporting, investigations, enforcement, discipline and monitoring. The implementation and enforcement of these commitments is expected to cost Binance tens or even hundreds of millions of dollars.
The obligations document is quite heavy
As outlined in Binance’s 13-page obligations document, compliance oversight will be overseen by the Department of Justice’s Criminal Division, Money Laundering and Asset Recovery Section, National Security Division, Counterintelligence and Export Control Section, and the U.S. Attorney’s Office for the Western District of Washington. Strict compliance requirements, combined with extensive oversight, paint a challenging picture for Binance’s future. Meanwhile, the US’s harsh attitude towards cryptocurrencies is quite clear. As we reported as Kriptokoin.com, the USA held a meeting with South Korea and Japan where they talked about cryptocurrencies.
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