Binance in talks with DOJ over dropping independent compliance monitor: Bloomberg

Binance is close to inking a deal with the U.S. Justice Department that would allow it to drop its court-mandated compliance officer potentially years ahead of schedule, according to a Bloomberg report, citing unnamed sources.

As part of its guilty plea in 2023 over money-laundering and sanctions violations, U.S. regulators appointed two separate independent compliance monitors to oversee Binance’s operations. The exchange, the world’s largest, also agreed to pay $4.3 billion in fines.

The alleged discussions are part and parcel of the U.S. regulatory regime’s softening stance towards the crypto industry under President Donald Trump’s second term. Trump has pushed regulators to prioritize writing clear guidance and clearing the path for crypto firms to reenter the United States.

Notably, in April, the DOJ sent out a memo stating that it "is not a digital assets regulator" and would therefore not pursue litigation or charges that would superimpose "regulatory frameworks on digital assets while President Trump's actual regulators do this work outside the punitive criminal justice framework."

Instead, the agency would prioritize cases involving actual harm and clearer federal crimes, like terrorism and hacks. Samson Enzer, a partner at Cahill Gordon & Reindel LLP, said at the time the DOJ would likely close some investigations or dismiss some charges under its updated mandate.

That said, money-laundering and sanctions violations are federal crimes in the U.S., typically investigated by executive-level agencies like the FBI, DEA, and OFAC, often in coordination with the Justice Department.

Binance’s plea

Binance agreed to a three-year monitorship under Forensic Risk Alliance as part of its plea deal with the DOJ, while the Treasury Department’s Financial Crimes Enforcement Network selected a partner at law firm Sullivan & Cromwell to serve as a monitor for five years. Forensic Risk Alliance was officially appointed as a monitor in May 2024.

It is unclear if the exchange is also engaged in discussions with FinCEN regarding its monitor. The move was reportedly the first time FinCEN, the Treasury Department’s anti-money-laundering unit, appointed a monitor as part of an enforcement action, according to The Wall Street Journal.

Richard Teng, who took over as chief executive of Binance after Changpeng Zhao was required to step down, also took steps to bolster the exchange’s compliance unit. The exchange spent an estimated $200 million on compliance in 2024, The Block previously reported. 

Binance entered into a plea deal with the DOJ in late 2023, as the exchange and former CEO Zhao agreed to settle criminal charges for failing to prevent bad actors and criminals from moving billions of dollars worth of ill-gotten proceeds through the platform, among other violations, like failing to register as a money transmitter.

DOJ prosecutors argued Binance prioritized growth and profits over compliance, charges to which the exchange and Zhao admitted fault. Independent monitors, one imposed for criminal conduct and the other for civil conduct, would help ensure that Binance was indeed operating adequate KYC and AML screens and following U.S. law.

Analysts at the time noted that Binance’s strict monitorship would redirect "internal resources" and impose a large cost on the exchange, while also offering it the opportunity to "re-enter a lot of markets they were dropped from."