US DoJ is concerned about a run on Binance should prosecutors bring fraud charges: Report

Officials reportedly speculated an indictment against Binance in the U.S. could cause a run on the exchange similar to what happened with crypto exchange FTX in November 2022.

The United States Department of Justice is reportedly considering charging cryptocurrency exchange Binance with fraud, but hesitating based on costs to consumers.

According to an Aug. 2 Semafor report citing people familiar with the matter, Justice Department officials are concerned about an indictment against Binance causing a run on the exchange similar to what happened with FTX in November 2022. They are reportedly considering fines or non-prosecution agreements for Binance rather than criminal charges in an effort to reduce the harm to consumers.

Binance was already reportedly the target of a criminal probe in the U.S. for allegedly violating the country’s sanctions on Russia. The U.S. Securities and Exchange Commission also filed a lawsuit against the crypto exchange in June for allegedly offering unregistered securities and operating illegally, and the Commodity Futures Trading Commission targeted the exchange and CEO Changpeng “CZ” Zhao in March for allegedly violating trading and derivatives regulations.

It’s unclear what impact filing criminal charges against Binance or CZ in the U.S. could have on the crypto space. Former FTX CEO Sam Bankman-Fried and former Celsius Network CEO Alex Mashinsky are both facing fraud charges for allegedly illegal actions at their respective companies.

At the time of publication, no charges had been filed against crypto exchange Binance or Binance.US. The global exchange announced the launch of Binance Japan on Aug. 1, but reports have also been circulating suggesting that the company conducted billions of dollars of crypto-related business in China and considered shuttering Binance.US to protect itself. Binance has denied the China reports and provided no comment on the report that it considered shuttering its U.S. business.

The price of BNB (BNB) dropped roughly 2.5% immediately following the release of the Semafor report and is $240.42 at the time of publication. The price of Bitcoin (BTC) followed a similar pattern, dropping from $29,331 to $28,903 within an hour of the report breaking.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine: Binance humiliated, HK needs 100K crypto workers, China’s AI unicorn: Asia Express