Binance Cooperation with Law Enforcement May Slow, Prosecutors Warned

Key facts

• A reported DOJ memo warned prosecutors that Binance may reduce cooperation in crypto investigations.
• The alleged change involves ending courtesy freezes and requiring Mutual Legal Assistance Treaties (MLATs) for account freezes and seizures.
• This shift could significantly slow down cross-border investigations into crypto crimes.
• Binance has denied any change to its cooperation policies with U.S. law enforcement.
• The exchange stated it continues to respond to valid requests through its Law Enforcement Request System.

Prosecutors have reportedly been warned that Binance, the world's largest cryptocurrency exchange, may significantly reduce its cooperation with law enforcement in crypto crime investigations. According to reports citing a Department of Justice (DOJ) memo, the exchange plans to stop offering "courtesy freezes" and will instead require formal legal processes, such as Mutual Legal Assistance Treaties (MLATs), for account freezes and asset seizures starting June 8.

This reported shift could substantially slow down investigations into crypto-related crimes, as MLAT procedures often involve lengthy government-to-government coordination. Stolen funds in cryptocurrency can move rapidly across borders, making swift action crucial for investigators to secure assets before they are transferred or dissipated.

However, Binance has strongly denied these reports, asserting that there has been no change in its cooperation with U.S. law enforcement. A spokesperson stated that the exchange continues to respond to valid requests through its Law Enforcement Request System and is even exploring ways to increase cooperation. The company highlighted its annual compliance spending of approximately $300 million and its handling of over 313,000 law enforcement requests globally.

The scrutiny follows Binance's landmark $4.3 billion U.S. criminal settlement in 2023, which required improvements to its compliance program. U.S. officials and investigators continue to monitor the exchange's controls and compliance efforts.