The U.S. Department of Justice is reportedly considering fraud charges against Binance.
Federal prosecutors are concerned about the possibility of a bank run on the exchange.
The prosecutors may hit the exchange with fines or come to non-prosecution agreements to protect its users.
Reports of potential charges against the exchange have led to a 4% decline in BNB’s price.
The United States Department of Justice is reportedly considering filing fraud charges against Binance. However, people familiar with the matter have revealed that the Justice Department is reluctant to file formal charges considering the potential impact on the customers of the world’s largest crypto exchange.
Federal Prosecutors Consider Fines For Binance
Semafor reported earlier today that the Department of Justice was concerned about a bank run on Binance in the event that they pursue a fraud lawsuit against the crypto exchange. Federal prosecutors are worried that an indictment may induce significant panic in the crypto market which may lead to the exchange’s customers losing money, as was seen in the case of Bahamas-based FTX last year.
Instead of an indictment, federal prosecutors are reportedly considering alternatives, including fines, penalties, and non-prosecution agreements. As per Semafor’s sources, this route would penalize Binance for its alleged violations while protecting its investors and customers.
Binance or its Chief Executive Changpeng Zhao is yet to put out a statement addressing the reports about potential fraud charges. The latest development prompted BNB to tank as much as 4%, pulling its price to a one-week low of $238. Bitcoin also witnessed a visible decline in its price.
News of the U.S. Justice Department’s potential fraud charges against Binance came less than a day after the Wall Street Journal reported that the exchange’s users traded $90 billion worth of crypto assets in China in a single month, despite a ban on crypto trading in the country. Citing internal figures and employees of the exchange, WSJ claimed that China accounted for 20% of Binance’s global volume, excluding trades made by high-volume traders.