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Binance May Have a Path Out of U.S. Regulatory Trouble. Cryptos Are Rallying.

Binance, led by Changpeng Zhao, is one of the crypto sector’s most important groups.

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Patricia De Melo Moreira/AFP via Getty Images

The world’s largest cryptocurrency exchange may have a pathway out of existing U.S. legal troubles, which would be good news for Binance as regulatory storm clouds gather around the industry. It could be a factor behind the latest rally in digital assets.

Binance expects to pay a fine to settle existing regulatory and law enforcement investigations into its business, The Wall Street Journal reported Wednesday, citing an interview with the group’s chief strategy officer, Patrick Hillmann. The crypto executive said Binance is working with regulators regarding possible remedies, but expects the outcome to likely be a fine—though it could be more, the report said.

Binance is likely under pressure on multiple fronts, with the Journal citing people familiar with the matter to report that the Justice Department has been investigating the group over potential violations of an anti-money-laundering law. The Commodity Futures Trading Commission (CFTC) has also been probing the exchange over potentially improperly offering crypto derivatives to U.S. investors, the report said.

Binance, which did not immediately respond to a request for comment from Barron’s, is not alone in feeling the pinch. 

Regulators and lawmakers have stepped up their scrutiny of digital asset companies over the past year, with cascading crypto prices, alleged market fraud, and a string of bankruptcies thrusting the nascent industry into the spotlight. That pressure looks to only be ramping up in the wake of crypto exchange FTX’s stunning collapse in November, with the Securities and Exchange Commission striking a distinctly more aggressive tone in multiple actions over the past few weeks.

If Binance can emerge from current scrutiny with only a fine, it would be a welcome sigh of relief for one of the industry’s most influential players. By far the world’s biggest crypto trading venue, a body blow to Binance would be a body blow to Bitcoin.

Optimism about the prospect of a fine could be a factor propelling a rally in cryptos over the past day. Digital asset prices have been weighed down over the past week, with a flood of concerns about U.S. regulatory storm clouds halting momentum behind a rally that had propelled Bitcoin higher at the start of the year. 

and its peers have marched higher and higher over the past day—bucking their correlation to the stock market, while the
Dow Jones Industrial Average
and the
S&P 500
have largely floundered—with few obvious catalysts. Binance could be one.

Write to Jack Denton at


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