Will the DOJ file charge binance? Here’s what we know
The Alpha:
- The US Department of Justice (DOJ) may end a year-long investigation into Binance’s potential involvement in money laundering and “criminal sanctions violations,” according to a Monday report from Reuters.
- Currently, opinions are divided among the federal prosecutors involved as to whether the DOJ should move forward with pressing charges against Binance’s top executive, or whether further investigation is necessary.
- Binance approached directly Reuters article i a tweet which contains the full answer, along with a blog post detailing the massive initiatives to combat cryptocrime.
Why it matters
Ongoing discussions among DOJ prosecutors regarding a year-long criminal investigation into Binance could determine the fate of crypto—and Web3 as we know it. As of 2018, the DOJ, namely its Money Laundering and Asset Recovery Section (MLARS) and National Cryptocurrency Enforcement Team offices, have been looking into Binance’s potential involvement, or at least its alleged complicity in money laundering schemes taking place around the world.
Should the DOJ move forward and end its investigation, some federal prosecutors believe the appropriate course of action would be to punish Binance’s top executives for “unlicensed money transmission, money laundering conspiracy and criminal sanctions violations,” according to four people familiar with U.S. law. enforcement and Binance’s internal advisory guidelines, i Reuters report.
To help clear the air, the official Binance Twitter account posted the response it sent over to Reuters in its entirety. Binance’s response notes that Reuters did not mention the steps Binance has taken internally to address potential bad actors using its platform for criminal activity.
At the moment, talks in the DOJ are at a standstill, and the investigation continues to cast a high shadow over the leading crypto exchange. But there may be a middle ground going forward that can satisfy both parties in the long term: regulation.
Through 2022, the IRS and SEC have been working to finally bring regulation into the nascent crypto and NFT spaces. Entities like Yuga Labs have happily committed themselves to investigations assessing the legitimacy of their operations and compliance with US laws, and the NFT space as a whole could benefit from some form of oversight. However, if the DOJ appears to be making an aggressive move against Binance in the coming months, an unfortunate truth about the burgeoning Web3 ecosystem may begin to be revealed publicly.
What will be next
In the wake of FTX’s recent collapse, Reuters has acknowledged the potential damage a formal case against leading crypto exchange Binance would inflict on the crypto community, citing the arguments of Binance’s defense lawyers against proceeding with criminal charges against management.
Yes, chaos will undoubtedly follow such a move. As it stands, Binance is now virtually uncontested in the cryptosphere. according to Reuters The report saw Binance trading volumes north of $1.6 trillion in October 2022 – a figure that dwarfs the $230 billion that its then-biggest competitor FTX processed in the same month.
Should Binance take a hit, a staggering majority of all active crypto traders and investors would feel the pain. And it would be felt hard — an unfortunate truth in Web3, especially considering Web3’s promise of a truly decentralized Internet. With no real competitors left to challenge Binance, Web3 is starting to look a lot like the side of the internet that builders like the Ethereum team have been working to provide meaningful alternatives.
But why is decentralization such a central focus of Web3 in the first place? Let’s do a quick recap with one of the site’s most influential builders. In a panel at the recently concluded Gateway event, Ethereum co-founder Joseph Lubin touched on why decentralization has spurred much of the drive to embed Web3. “A lot of people have been hurt for millennia by bad centralized systems. You can hide information, you can cheat in so many different ways,” Lubin said. Citing FTX’s collapse as an example of the dangers of creating truly centralized power structures in Web3, Lubin continued, “I’m grateful that it’s going to enable us to drive a narrative that really describes the value of decentralization in strong terms. .”
Sure, Binance can function more cohesively as an organization than its former competitor. But that doesn’t diminish the seriousness of the problem: Within the entire crypto space, Binance stands tall as its undisputed central leader. With so much hanging in the balance on a macro level, we have reached a pivotal moment in the quest for decentralization, with massive implications for the future of crypto, NFT and Web3.
