Binance is reportedly in discussions with the U.S. Department of Justice (DOJ) to potentially end its court-mandated compliance monitorship early, a move that could significantly ease regulatory pressures on the cryptocurrency exchange. This development comes less than two years after Binance reached a $4.3 billion settlement with U.S. authorities in 2023, resolving allegations of anti-money laundering and sanctions violations.

As part of the 2023 settlement, Binance agreed to a three-year monitorship with Forensic Risk Alliance (FRA) and a five-year monitorship with a partner at law firm Sullivan & Cromwell, selected by the Treasury Department's Financial Crimes Enforcement Network (FinCEN). FRA was officially appointed as a monitor in May 2024. The monitors were put in place to ensure Binance adheres to U.S. financial regulations, particularly Anti-Money Laundering (AML) and Know-Your-Customer (KYC) requirements. DOJ prosecutors had argued that Binance prioritized growth and profits over compliance, a charge that both the exchange and its former CEO, Changpeng Zhao, admitted to.

According to unnamed sources, federal prosecutors are considering the request to drop the DOJ monitor, although no final decision has been made. If approved, Binance would likely need to adopt enhanced compliance reporting requirements to satisfy the Justice Department. The DOJ's willingness to consider an early termination reportedly stems from a broader policy reassessment under the current administration. The shift was indicated in an April memo where the Justice Department stated it "is not a digital assets regulator" and would prioritize cases involving clearer federal crimes like terrorism and hacks, rather than using its authority to superimpose regulatory frameworks.

Binance's potential early release from the DOJ monitorship could be a significant win for the crypto exchange. The guilty plea in 2023 and the $4.3 billion settlement marked a pivotal moment for the exchange, leading to Changpeng Zhao stepping down as CEO and serving a four-month prison sentence. Since Richard Teng took over as CEO, Binance has taken steps to bolster its compliance unit, reportedly spending an estimated $200 million on compliance in 2024.

While the DOJ is considering removing its monitor, the Treasury monitor remains active. It is unclear if Binance is also engaged in discussions with FinCEN regarding its monitor.

The potential change in oversight comes amid criticisms about the cost and disruptiveness of outside monitors. Some argue that it could signal reduced regulatory oversight and fuel impunity in the Web3 community, reinforcing the view that major firms evade accountability. Others point to a shifting approach to crypto enforcement under the Trump administration, with the SEC also recently dropping a lawsuit against Binance.