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Regulatory Scrutiny on Binance in the US Intensifies with Potential Fines Looming

Regulatory Scrutiny on Binance in the US Intensifies with Potential Fines Looming

Binance is anticipating the payment of fines in the US due to inquiries by regulators regarding its associations with two trading firms and CEO Changpeng Zhao.

The Securities and Exchange Commission is investigating the links between Zhao, Merit Peak, and Sigma Chain AG, two market makers working on behalf of Binance’s US affiliate.

Binance’s Chief Strategy Officer, Patrick Hillmann, stated that the company collaborates with regulators to decide the necessary remedial steps to rectify the situation.

Hillman acknowledged that the consequence of these negotiations would probably be a monetary penalty, and regulatory authorities may decide on further action.

The regulators examine Binance.US’s disclosure to customers regarding its affiliation with the trading firms. Binance representatives did not comment immediately on the matter.

Moreover, the Justice Department has been investigating possible violations of the US Bank Secrecy Act by Binance since September of last year. The department’s anti-money laundering unit previously requested that the exchange disclose communications from Zhao and other top executives concerning issues such as identifying fraudulent transactions and drawing US-based customers.

The Commodity and Futures Trading Commission (CFTC) has also been looking into Binance’s global exchange for alleged authorization of US nationals to trade on its platform since March 2021.

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Hillman acknowledged that the current situation regarding digital assets and regulatory activities in the US is “puzzling,” but he is optimistic about the direction of the discussions with regulators.

Last week, the SEC accused Kraken of two charges concerning its staking products, and the exchange agreed to pay $30 million in settlement.

This move received criticism from SEC Commissioner Hester Peirce and others, who have long opposed the agency’s attempts to sidestep Congress as “enforcement regulation.”

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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