DOJ Warns Prosecutors of Weaker Binance Cooperation in Crypto Cases

DOJ Memo Raises Concerns Over Binance Assistance

An internal memo from the US Department of Justice, circulated in early June, informed prosecutors handling crypto cases that Binance may impose stricter conditions on requests to freeze or seize customer assets. The document, prepared by DOJ digital currency counsel Rachel Jones, noted that the exchange could move away from voluntary "courtesy freezes" and require formal processes such as Mutual Legal Assistance Treaties (MLATs) in some instances.

This development comes as law enforcement has relied on Binance's voluntary support for tracing and securing illicit funds linked to hacks, ransomware, sanctions violations, and fraud. With Binance accounting for around 39% of global spot crypto trading volume in May, any slowdown could affect the speed of investigations.

Binance Disputes the Claims

Binance has rejected the memo's characterization, stating there has been and will be no change to its cooperation with US law enforcement. A company spokesperson told outlets that the firm is expanding its engagement with authorities to combat illicit activity on the blockchain.

The exchange attributes the situation to a possible misreading of its obligations under the Abu Dhabi Global Market (ADGM) license, which took effect in January 2026. ADGM data protection guidance generally limits certain disclosures to non-UAE law enforcement but includes provisions for legal claims, with examples involving US regulators. Binance says it has contacted both the DOJ and ADGM officials to clarify that its handling of US requests remains consistent.

Background on Binance's US Settlement and Oversight

The issue arises against the backdrop of Binance's 2023 guilty plea to violations including Bank Secrecy Act failures, unlicensed money transmission, and sanctions issues. The resolution involved over $4.3 billion in penalties and an agreement for full cooperation with law enforcement, along with a period of independent compliance monitoring.

Since then, broader shifts at the DOJ have included pauses on certain corporate monitoring programs and the closure of the National Cryptocurrency Enforcement Team. These changes have increased the importance of voluntary exchange support in ongoing cases.

Questions about compliance practices have persisted, with reports citing large transfers through the platform linked to various concerns, prompting inquiries from lawmakers such as Senator Richard Blumenthal.

Implications for Crypto Investigations

If formal MLAT routes become more common, cross-border efforts could face longer timelines, as these government-to-government processes involve multiple steps and can take weeks or months. Courtesy freezes have allowed quicker action while formal paperwork is prepared.

Former DOJ Fraud Section official Scott Armstrong noted that such shifts could create additional hurdles for investigators.

Binance maintains that its US practices have not altered and that it continues to use its established systems for legitimate requests. The DOJ has not issued public comments on the memo at the time of reporting.

Ongoing Context in Crypto Regulation

The exchange continues operations under its global licenses while addressing US regulatory matters. The situation underscores tensions between different jurisdictions' data protection standards and the needs of international law enforcement in the crypto space.