Binance's BNB Surges on Reports of Potential $4 Billion Settlement with DOJ
The price of BNB, the native token of the Binance cryptocurrency exchange, has surged over 7% in the past 24 hours following reports of a potential $4 billion settlement with the United States Department of Justice (DOJ). This marks the highest price point for BNB since June, when it reached $266 on November 20.
The price increase came just hours after Bloomberg broke the story of the potential settlement. The price initially rose to $262 before trading sideways and then making a further upward move.
BNB's 7% gain made it the biggest gainer among the top 20 cryptocurrencies by market capitalization, followed by Bitcoin and Wrapped BTC as the only other coins in the 24-hour green zone. Over the past week, BNB has posted a 5.86% growth, and over the past month, it has risen by 21.67%. However, over the past year, the asset has seen a relatively modest 0.7% increase due to regulatory scrutiny, particularly in the United States.
Currently, BNB is still 61.4% below its all-time high of $686, which it reached during the 2021 bull market.
A Potential End to Binance's Legal Troubles
The Bloomberg report suggests that Binance's legal troubles with the DOJ may be nearing an end as early as next month. Both parties are reportedly working on a $4 billion settlement deal that would halt the department's investigation into the company in exchange for Binance meeting certain conditions.
According to sources familiar with the matter, Binance would be able to continue operating in the United States while complying with the law. The company would be required to pay a $4 billion fine, publish a report admitting and detailing its violations of U.S. law, and agree to ongoing monitoring to ensure future compliance.
If Binance agrees to these conditions, the DOJ would file a criminal complaint but would not prosecute the exchange. Binance CEO Changpeng Zhao could still face criminal charges for alleged money laundering, bank fraud, and sanctions violations. However, Zhao resides in the United Arab Emirates, which does not have an extradition treaty with the United States, so these charges may not lead to an arrest.
Increased Confidence in Binance
The reports of a potential settlement have boosted the confidence of BNB holders, as a deal would mean an end to the long-running investigation into the company. The fall of FTX has intensified regulatory scrutiny of the cryptocurrency industry, with the aim of protecting investors.
This year, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have brought charges against Binance's US entity for alleged violations, which the company has denied. These lawsuits have led to reduced investor confidence and a decline in the exchange's spot trading volumes and market share.
A potential settlement with the DOJ would be a significant positive development for Binance and could help to restore investor confidence in the company. It could also lead to a recovery in BNB's price, as investors regain confidence in the exchange and its future prospects.