Binance Refutes Alleged “Less Cooperation” In US DOJ’s Crypto Cases

• Binance clarified that there are no changes in its policies regarding its cooperation with the US DOJ and law enforcement officials.

Binance, being on top of the food chain in the crypto industry, has no shortage of controversies and detractors. Recently, it’s again at the center of a bad Public Relations (PR) drama after a news outlet leaked a US Department of Justice (DOJ) staff memo mentioning the exchange.

DOJ’s Internal Memo Mentions Binance

According to a report that first appeared on The Information, there’s an internal memo circulating at the US DOJ. Sources familiar with the matter claimed that the agency has warned its roster of attorneys that Binance is cooperating less with authorities.

The document stated that Binance no longer conducts “courtesy freezes.” The decision took effect on June 8.

Courtesy freezes are voluntary restrictions that crypto exchanges impose on users with suspected ill-gotten gains or accounts linked to illegal activities. Companies like Binance typically enforce these at the request of law enforcement officials or victims. Their purpose is to prevent suspects from draining their funds and to give authorities enough time to obtain the necessary papers, such as subpoenas or court orders, for official asset freezes, seizures, or other necessary legal action.

Instead of the customary practice, Binance will now require Mutual Legal Assistance Treaties (MLATs) or other formal legally binding documents before any asset freezes or seizures.

Since crypto moves quickly, the strict bureaucratic process will provide malicious actors with enough window to obfuscate their tracks or transfer their holdings to exchanges outside US jurisdiction. In other words, it will only complicate the investigation and recovery of ill-gotten assets.

Binance Denies Allegations

Binance vehemently denied the circulating reports. It told BeInCrypto that there haven’t been any changes to its policies centering on cooperation with law enforcement officials.

Additionally, the exchange noted that the opposite is actually happening. It revealed that it’s examining more ways to enhance its cooperation with legitimate investigations.

“Binance will continue to cooperate with US law enforcement requests in connection with their investigations as normal,” said a Binance spokesperson to the source. “Any suggestion that Binance has reduced or is reducing cooperation with law enforcement is wrong.”

Analysts noted that if the reports check out, Binance’s insistence on formal procedures, such as MLATs, might not be a sign of “less cooperation.” It’s likely a defensive pivot toward strict procedural compliance to avoid possible legal repercussions with its clientele and to pass the burden to law enforcement agencies instead.

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