Could US Prosecutors Bring Fraud Charges Against Binance, Sparking a Run on Crypto?

Crypto Exchange Binance in Trouble

The United States Department of Justice is reportedly considering charging the popular cryptocurrency exchange Binance with fraud but is hesitating due to the potential costs to consumers. According to an Aug. 2 Semafor report citing people familiar with the matter, Justice Department officials are concerned that an indictment against Binance could cause a run on the exchange similar to what happened with FTX in November 2022. As a result, they are exploring fines or non-prosecution agreements as an alternative to criminal charges in order to reduce the harm to consumers.

Binance has already been the target of criminal probes in the U.S. for allegedly violating the country’s sanctions on Russia, and the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission have both filed lawsuits against the crypto exchange for various offenses. At the time of publication, no charges had been filed against crypto exchange Binance or Binance.US.

The situation has raised questions about the future of popular crypto exchanges like Binance, Fetch Crypto, Flare Crypto, Enzyme Crypto, Fitfi Crypto, Crypto.net, Finance Crypto, Crypto.com, Emax Crypto, and Ergo Crypto.