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In a significant development in the world of cryptocurrency, Binance, one of the largest digital currency exchanges, faces a new level of regulatory scrutiny. The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are intensifying their oversight, leading to what a former SEC officer has termed a “compliance tsunami.”
DOJ’s Unprecedented Oversight:
Recent disclosures by the DOJ reveal a comprehensive supervisory role over Binance. The extent of this oversight, coupled with mandates enforced by the U.S. Financial Crimes Enforcement Network (FinCEN), presents a formidable challenge for the crypto giant. John Reed Stark, a former SEC officer, emphasizes the rarity and intensity of such DOJ/FinCEN oversight on an international financial company. The DOJ Compliance Monitor’s mission encompasses a broad range of responsibilities, requiring a detailed 13-page summary to outline Binance’s compliance obligations.
SEC’s Involvement and Notice of ‘Supplemental Authority’:
Although the SEC is not directly involved in the compliance settlements between Binance, DOJ, FinCEN, and the Commodity Futures Trading Commission (CFTC), it has taken a significant step by filing a “Notice of Supplementary Authority” in a federal court. This move allows the SEC to request judicial notice over incriminating details from the Binance-DOJ plea deal, potentially undermining Binance’s defense against SEC allegations.
Binance’s Compliance Commitments:
Binance is now bound to an unprecedented level of compliance, involving new procedures, anti-circumvention controls, periodic review, comprehensive reporting, and investigation. Implementing these measures is expected to be a costly endeavor, potentially running into tens of millions of dollars.
Future Outlook:
The future of Binance hinges on its ability to adapt to this heightened regulatory environment. Stark notes that the firm’s survival in the rapidly evolving cryptocurrency market depends largely on its response to these new challenges. Binance stands at a critical crossroads, facing both opportunities and obstacles in its path.
Source: https://coinpedia.org/news/ex-sec-official-raises-alarm-bells-is-this-the-downfall-of-binance/