Binance representatives tipped off VIP traders about impending DOJ settlement in advance: Bloomberg Binance representatives tipped off VIP traders about impending DOJ settlement in advance: Bloomberg
Market makers were purportedly alerted to the company's readiness to pay a multi-billion-dollar fine at a VIP event in Singapore in September.
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Updated: Dec. 1, 2023 at 8:23 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
30As negotiations between Binance and U.S. authorities over legal violations came to a head in September, select high-value traders got an inside look at what was to come, according to new reporting from Bloomberg.
According to unnamed attendees of a Binance-hosted dinner in Singapore, company representatives suggested to VIP traders that Binance would likely pay around $4 billion to settle and survive its legal troubles with the Department of Justice. These personnel allegedly suggested the firm could afford to pay the penalty.
Binance has disputed these characterizations of the event but declined to clarify further.
Reckoning
In November, just two months later, Binance CEO Changpeng Zhao entered a guilty plea in a U.S. federal court for charges related to money laundering. Zhao stepped down as CEO as part of his plea agreement, while the company was fined $4.3 billion.
According to the U.S. Department of Justice (DOJ), Binance committed numerous financial crimes over the years, including failing to register as a money transmitter despite significant U.S. operations. It further alleged that Binance violated sanctions requirements, anti-money laundering rules, and know-your-customer protocols. Though Binance claimed to block U.S. users in 2019, the DOJ said it secretly kept providing services to critical high-net-worth traders.
The $4.3 billion settlement with the DOJ closes just one chapter of Binance’s ongoing legal saga. The Securities and Exchange Commission has filed separate charges against Binance, its U.S. affiliate BAM Trading, and founder Changpeng Zhao. The SEC alleges that Binance and its U.S. affiliate, BAM Trading, operated unregistered exchanges, broker-dealers, and clearing agencies while selling unregistered securities, including the BNB token and stablecoin BUSD, among other violations.
Zhao was succeeded as CEO by Richard Teng, who has held a number of leadership roles in the Binance organization since 2021. In a letter to VIP clients, incoming Teng expressed plans to deepen relationships as Binance enters its “best days” ahead. However, with some lawsuits still pending, storm clouds remain on the horizon.
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Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
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