Global cryptocurrency exchange giant Binance Holdings Ltd. is reportedly close to reaching a potential agreement with the US Department of Justice that could eliminate a key regulatory requirement from its previous $4.3 billion settlement - the ongoing external compliance monitoring of its operations.
According to sources, federal prosecutors are in discussions with Binance regarding the removal of the external compliance monitor requirement. This potential move would represent the latest example of the Justice Department's recent trend toward relaxing corporate oversight, as several monitors appointed during the previous administration have already been withdrawn and the department reassesses its approach to external monitoring.
Binance paid the $4.3 billion fine in 2023 as part of a settlement agreement - one of the largest corporate penalties in US history. Since then, the company has been working to rebuild trust with US authorities.
Binance founder Changpeng Zhao pleaded guilty under the agreement and served a four-month prison sentence. In a podcast interview this May, he revealed he was seeking a presidential pardon from Trump. Binance has also been involved in the development of stablecoins for World Liberty Financial Inc, a company associated with the Trump family business interests.
The Justice Department has not yet made a final decision on whether to remove the monitor. The original monitoring agreement was set for three years. Even if external monitoring is eliminated, Binance may still need to strengthen its compliance reporting to gain DOJ approval.
**Relaxation of External Monitoring**
The Justice Department is evaluating whether to abandon external monitor requirements for certain companies. Previously, some corporations complained that such oversight measures were both expensive and disruptive to normal business operations.
The DOJ has long viewed monitors as an important tool to prevent corporate recidivism, applicable to various violations including bribery and money laundering. Earlier this year, Matthew Galeotti, the new head of the Justice Department's Criminal Division, stated in a memo that while monitoring mechanisms have proven effective in reducing repeat offenses, "they can also impose significant costs and interfere with normal business operations."
Court records show the Justice Department has already terminated monitoring agreements for three companies that were established during the previous administration. For example, the DOJ decided to no longer require two subsidiaries of Glencore Plc to undergo external monitoring. According to the company's annual report, these subsidiaries incurred total monitoring costs of $142 million from 2023 to 2024.
Two other companies - a subsidiary of UK bank NatWest Group and shipbuilder Austal USA - have replaced their external monitoring requirements with "enhanced compliance reporting."
**Binance's Dual Monitoring**
Under its plea agreement, Binance originally agreed to oversight by two independent monitors - one from the Justice Department and another from the Financial Crimes Enforcement Network (FinCEN) under the US Treasury Department. The FinCEN-appointed monitor remains in place. There were reports in April that Binance had attempted to persuade the Treasury Department to remove monitoring requirements from its settlement agreement.
Notably, the cryptocurrency industry provided substantial political donations to Trump during the election and funded numerous congressional candidates who support crypto-friendly policies. Since taking office, Trump has appointed several federal regulatory officials with favorable views toward cryptocurrency and signed executive orders long advocated by the crypto industry, such as providing banking access for crypto companies. Under Trump's administration, the Securities and Exchange Commission (SEC) has also suspended or terminated multiple investigations into crypto companies, including Binance.
However, the Justice Department has not eliminated external monitoring for all companies. For instance, after a US subsidiary of Toronto-Dominion Bank became the first American bank to plead guilty to money laundering conspiracy charges, the DOJ decided to retain its monitor.
Another company, Balfour Beatty Communities LLC, had its monitoring agreement originally set to expire in September this year. The Justice Department recently announced an extension until June 2026 to allow more time to test its internal controls and compliance programs. The company admitted in 2021 to defrauding the US military.
**Boeing Case Draws Attention**
External monitoring became a point of controversy in the Justice Department's case against Boeing. The DOJ initially required an independent monitor in a plea agreement with Boeing due to two 737 Max crashes. However, a Texas judge rejected the agreement because the monitor selection criteria involved diversity and inclusion considerations.
In May this year, the Justice Department and Boeing announced a temporary agreement allowing Boeing to avoid criminal prosecution by working with a "compliance consultant" rather than establishing an independent monitor with mandatory certification authority.