The US Department of Justice (DoJ) is mulling whether to press fraud charges against Binance, as per a Semafor report.
However, as per the report, the DoJ is worried that if it indicts Binance, it could trigger a rush to withdraw balances on the exchange, similar to the rush that brought down FTX last November.
They worry this could result in customers losing money, as well as cause a fresh bought of panic in the broader crypto market.
Crypto markets came under modest sell pressure in wake of the report breaking across newswires.
Bitcoin (BTC) dropped from the $29,300s to test the $29,000 level.
Ether (ETH) dropped from around $1,845 to fresh daily lows near $1,820 before recovering somewhat to the $1,830s.
BNB (BNB), the cryptocurrency that powers the smart-contract-enabled Binance Smart Chain, fell as much as 3% on the reports, before recovering around 2%.
DoJ prosecutors are considering compromise options such as fines and deferred or non-deferred prosecution agreements that would reduce harm to the consumer, whilst still holding Binance accountable, the Semafor report said citing people familiar with the matter.
Reports that the DoJ is mulling charges against Binance come after the US Securities and Exchange Commission sued the exchange, which is far and away the world’s largest and most influential, and its billionaire founder Changpeng Zhao.
The SEC hit Binance with 13 charges, which included operating as an unregulated securities exchange in the US, as well as commingling investor funds.
The US Commodity Futures Trading Commission (CFTC) has pressed similar charges against the firm.
As per CoinGecko’s Q1 2023 Crypto Industry Report, FTX had a 5% market share of the spot crypto trading volumes across the top 10 cryptocurrency
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