Binance Insiders Allegedly Provided Advance Notice of DOJ Settlement to VIP Traders: Bloomberg Reports

Insider Insights and VIP Dinner

As negotiations between Binance and U.S. authorities regarding legal violations unfolded in September, select high-value traders were reportedly given advance information, as per new reports from Bloomberg.

Attendees of a Binance-hosted dinner in Singapore, as unnamed sources claim, were informed by company representatives that Binance was likely to settle with the Department of Justice for approximately $4 billion to resolve its legal issues. These representatives allegedly conveyed that the company had the financial capacity to handle the settlement.

Disputed Claims

Binance has contested these characterizations of the event but has chosen not to provide further clarification.

Legal Reckoning

By November, a mere two months later, Binance CEO Changpeng Zhao entered a guilty plea in a U.S. federal court on charges related to money laundering. As part of his plea agreement, Zhao stepped down as CEO, and the company received a fine of $4.3 billion.

According to the U.S. Department of Justice (DOJ), Binance was involved in numerous financial crimes over the years, including failure to register as a money transmitter despite substantial U.S. operations. The DOJ further alleged violations of sanctions requirements, anti-money laundering rules, and know-your-customer protocols. Despite claiming to block U.S. users in 2019, the DOJ asserted that Binance secretly continued to provide services to crucial high-net-worth traders.

Ongoing Legal Saga

The $4.3 billion settlement with the DOJ marks just one chapter in Binance’s ongoing legal challenges. The Securities and Exchange Commission (SEC) has separately filed charges against Binance, its U.S. affiliate BAM Trading, and founder Changpeng Zhao. The SEC alleges that Binance and BAM Trading operated unregistered exchanges, broker-dealers, and clearing agencies while selling unregistered securities, including the BNB token and stablecoin BUSD, among other violations.

Leadership Transition

Following Zhao’s departure, Richard Teng assumed the role of CEO. Teng, who has held various leadership roles within Binance since 2021, addressed VIP clients in a letter expressing plans to deepen relationships as Binance looks ahead to its “best days.” However, with some lawsuits still pending, uncertainties loom on the horizon.