Binance Holdings Ltd, the world’s largest cryptocurrency exchange, is working toward an agreement with the US Justice Department that could remove a key compliance requirement from its $4.3 billion settlement over alleged lapses in money-laundering controls.
Reportedly, the Justice Department is discussing with Binance whether it should continue to have an outside compliance monitor. The development marked another sign of the DOJ’s softer stance on independent oversight after rolling back several monitors introduced under the Biden administration.
This comes as Binance sought to reassure customers on Tuesday last week after one of the largest supply chain attacks ever to hit the JavaScript ecosystem. As earlier reported by Cryptopolitan, the exchange said no user data or assets were compromised during the incident. In a statement posted on X, Binance confirmed its database was unaffected by the breach, which targeted widely used Node.js packages involved in more than 2 billion weekly app downloads.
The US Justice Department has scrapped monitorship programs for some companies
Binance has been trying to smooth ties with US regulators. The exchange’s founder. Changpeng Zhao, who went to prison for four months as part of the 2023 settlement, even said in May he hoped for a pardon from President Trump. The exchange has also worked with the Trump family’s World Liberty Financial to establish a new stablecoin. Per reports, the platform wrote the basic code to power WLFI’s USD1.Â
The Justice Department is still reviewing the status of the three-year Binance monitorship. However, it would probably demand the company step up its compliance reporting before dropping it.Â
US prosecutors have also been considering dropping the requirement for other companies to retain outside monitors, a compliance tool critics have claimed is both expensive and intrusive. The DOJ has often used independent monitors in settlements to prevent repeat corporate offenses, such as bribery or money laundering. However, in a memo this year, Criminal Division leader Matthew Galeotti noted that these monitors can also add extra costs and interfere with lawful business operations, despite their usefulness.
So far, according to recent court filings, the DOJ has already terminated monitorships for three firms that agreed to them under the Biden administration. Additionally, prosecutors stated they would drop monitors at two Glencore Plc subsidiaries, which reported $142 million in related costs over 2023 and 2024.Â
Not to mention, they agreed to end monitoring for a NatWest Group Plc subsidiary and Austal USA after both companies consented to stricter compliance reporting obligations.
Binance has been under dual monitorships since its DOJ plea and Financial Crimes Enforcement Network (FinCEN) settlement, though only the FinCEN-appointed monitor is still active at the moment.
Boeing agreed to use a compliance consultant instead of a monitor
Several companies are still under monitoring. According to Bloomberg Law, a monitor remains at a US subsidiary of Toronto-Dominion Bank, which pleaded guilty to conspiracy to commit money laundering, the first case of its kind. Balfour Beatty Communities LLC will also stay under oversight until mid-2026 so regulators can continue to assess its compliance systems after its 2021 guilty plea for defrauding the US military. Other companies are still under oversight but not under monitorships.
The Boeing case especially turned monitorships into a point of contention. Prosecutors reversed course on installing an independent monitor tied to the plea agreement over the deadly 737 Max crashes. The original deal had been rejected by a Texas judge, who criticized a requirement that diversity and inclusion play a role in the monitor selection process.
In May, the government and Boeing announced that they had struck a preliminary deal under which the company would sidestep criminal charges. The agreement calls for using a compliance consultant, not a monitor, who would guide the company without formally signing off on its compliance program.
If you're reading this, you’re already ahead. Stay there with our newsletter.
