The US Department of Justice (DoJ) is considering whether to pursue charges against Binance after a criminal investigation into the company.
The DoJ commenced its probe into Binance in 2018, seeking to better understand whether Binance had met compliance criteria based on US anti money laundering laws.
According to Reuters, sources close to the matter who spoke under a condition of anonymity, said there is sufficient evidence to move aggressively against the exchange, but the implications would be significant.
The DoJ may undertake legal action against Binance and its founder, Changpeng Zhao, along with several other officials.
However, some have advocated for a more docile approach, and for the institution to avoid rushing into the matter headlong, instead taking its time to collect additional evidence.
The repercussions of a lawsuit filed by a leading law enforcement agency that ends up lacking substance could create the illusion that the crypto industry answers no one.
It would also undermine public trust into the institutions’ ability to regulate and protect consumers.
To bring any legal proceedings against Binance, the DoJ would need to collect the signatures of the chief of the Money Laundering and Asset Recovery Section and leaders from other two offices, according to Reuters, along with a number of high-level officials within the Department.
Reuters believes that the DoJ has spoken to several former Binance advisors and has sufficient evidence to entertain the idea.
The news comes at a particularly difficult time for the industry. Binance responded to the report tersely and said: “We don't have any insight into the inner workings of the US Justice Department, nor would it be appropriate for us to comment if we did.”
The news comes after rival crypto exchange FTX imploded after it transpired that the company’s former boss, Sam Bankman-Fried, had syphoned off funds to Alameda Research, another company of his.
Any legal move that succeeds against Binance could be the final nail in crypto coffin, with all the industry’s biggest names mercilessly discredited.
Previously, Dogecoin founder Billy Markus warned that a Binance or Tether crash could be the end of the industry.
Now, both seem to be wobbling with Coinbase asking users to switch from USDT to USDC, a move that Tether described as “wildly inappropriate”.
While these suppositions sound convenient though, toppling the crypto industry would take a lot more than a suspicion that the DoJ may act against Binance, and even if it did, the industry itself is not solely focused on US.
Nexo, a Bulgarian cryptocurrency bank, recently withdrew from the US market, and Binance itself is represented in the market through Binance.US, a company that it argues is unrelated to its global operations.