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- Binance seeks to end DOJ monitor after $4.3B settlement.
- DOJ may remove compliance monitor if Binance meets standards.
- Binance pushes for early end to external compliance oversight.
Binance is currently in talks with the U.S. Department of Justice (DOJ) to remove the compliance monitor. This watchdog was instituted when Binance acknowledged that it did not adhere to the anti-money laundering (AML) criteria and paid a settlement of $4.3 billion. This settlement caused the company to make major alterations to its internal operations. The DOJ has also raised issues regarding Binance’s capability to abide by the U.S. regulations, which led to the necessity of external control.
The compliance monitor’s responsibility was to review Binance’s customer identification process, monitor suspicious transactions, and ensure that its global business complies with the regulations. The DOJ’s external oversight was a result of concerns over Binance’s internal reporting. This notwithstanding, the current administration has changed the DOJ’s attitude toward monitors. The officials doubted the benefits of such external oversight and its high cost in the long run.
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Binance’s Efforts to Improve Compliance
Binance feels that its compliance efforts have come a long way. The company has already increased the size of its compliance team and internal control. According to Binance, these advances reflect how it has been able to keep in line with regulatory expectations. The firm has argued that the external monitor is no longer required. The DOJ has also permitted other firms to substitute their monitors with heavier inner checks: Glencore Plc is among them.
Although this would be improved, Binance would remain subject to strict reporting requirements. If the DOJ consents to the removal of the monitor, then the company will be subjected to regular compliance audits. It would also have to present elaborate reports to the authorities. An independent monitoring with regard to the settlement between Binance and the (FinCEN) of the Treasury Department will be left in place. This will guarantee that there is independent oversight.
The negotiations between Binance and the DOJ are still underway. A final decision has yet to be made and if successful, this could impact other companies in the crypto industry facing similar scrutiny.
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