Binance’s settlement with the US Department of Justice (DOJ) has been the talk of the town in recent days. Obviously, the saga around this story is not over. New allegations involving the crypto company have surfaced. Binance being accused of having informed its most privileged investors of the possibility of a deal with the DOJ. This, well before its officialization.
Binance reportedly informed its VIP investors of the agreement with the DOJ
Will Binance have to manage a crisis of confidence among its investors even though it seems to be remaining in the crypto ecosystem following its setbacks with the DOJ? This could be in view of the allegations of selective disclosure of information to which she is the subject.
This remains to be proven, but according to recent data, the exchange would have informed its most important clients (VIP) of the possibility of a financial agreement with the American justice system. This, even though this information was supposed to remain secret.
Thus, according to sources, Binance VIP investors were aware of the imminence of a $4.3 billion deal with the DOJ. This, since a private conference organized in Singapore in September for them, well before the public announcement of the arrangement.
Concretely, during this exclusive meeting, some of Binance’s main investors asked the leaders of the crypto firm about the probability of such an agreement. The latter would have convinced them of the company’s ability to pay such a fine.
Will a new legal storm hit Binance?
This development raises concerns about potential preferential treatment and selective disclosure of information to certain investors. A situation that casts a shadow over the transparency of the process that led to Binance’s historic agreement with the DOJ.
It must be understood that the matter is, in several respects, problematic. Beyond transparency issues, the selective disclosure of information to privileged investors is contrary to the principles governing a competitive financial market.
It first creates unequal access to information favoring the making of an informed decision. It then encourages market distortion leading to often unjustified movements. Not to mention that it undermines the confidence of investors who, fearing the unfairness of the market, are discouraged from investing. It is for all these reasons that the selective disclosure of information to privileged investors is considered a crime and is punished as such. In other words, if these facts are proven, Binance is exposed to new sanctions. For the moment, the crypto company, now by Richard Teng, rejects these accusations outright.
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