'Binance says an audit shows proof of reserves of customer funds. But its auditor will not vouch for the reserves nor the methodology demanded by Binance.'
- Mish,
Binance's Alleged Crypto Audit Failed, Not Even Its Auditor Would Vouch For It, December 12, 2022
'In recent months, prosecutors at NCET and the Seattle office concluded they had sufficient evidence to prepare charges not only against Binance, but also against Zhao and some other executives, the people said..''Reuters has investigated Binance's financial crime compliance over the course of 2022. The reporting showed that Binance kept weak anti-money laundering controls, processed over $10 billion in payments for criminals and companies seeking to evade U.S. sanctions, and plotted to evade regulators in the United States and elsewhere.
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The U.S. Bank Secrecy Act, designed to protect the U.S. financial system from illicit finance, requires crypto exchanges to register with the Treasury Department and comply with anti-money laundering requirements if they conduct "substantial" business in the United States. Binance has never done so, despite almost a third of its users being U.S.-based the year of its launch, according to a company blog post.
Instead, Zhao approved a proposal from a person providing advice to Binance to "insulate" Binance from U.S. scrutiny by setting up a new American exchange that would draw regulators' attention away from the main platform, as reported by Reuters in October. Zhao became concerned about U.S. authorities gaining access to Binance's internal records, company messages show.
A guide issued to employees for one encrypted messaging service listed its "automatic self-erasing messages" as a benefit.
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In recent months, prosecutors at NCET and the Seattle office concluded they had sufficient evidence to prepare charges not only against Binance, but also against Zhao and some other executives, the people said. However, MLARS leadership has been hesitant to move forward with an indictment, leading to frustrations within the investigation team, the people said.
MLARS has a reputation in the Justice Department for moving slowly in reaching prosecution decisions, people familiar with its activities said. In October, however, the Department appointed a new MLARS chief, Brent Wible, who previously worked in the Fraud Section and before that as a prosecutor in the Southern District of New York. Both of those offices are known, among current and former law enforcement officials, for pursuing cases more aggressively.
Binance has hired a former chief of MLARS, Kendall Day, a partner at Gibson Dunn, to engage in discussions with the Justice Department. Day met with Justice officials in Washington in recent months, three of the people said. Officials discussed with Day a possible resolution to the case out of court, whereby suspects would potentially plead guilty or pay a fine, the three sources said. Day didn't comment.'
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Exclusive: U.S. Justice Dept is split over charging Binance as crypto world falters, sources say. December 12, 2022
Context(Banking Reform) - '..the Fed has lost every systematic tether to common sense..' - 'Fed Operations Look More Like a Ponzi Scheme..'(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..''..a process of transition toward the only world financial order..' - Jesús Huerta de Soto