Law360 Features Andrew St. Laurent’s Insights on Possible Binance Criminal Probe

September 11, 2023

Law360 has published an article by Harris St. Laurent & Wechsler LLP partner Andrew St. Laurent about the ramifications of a possible federal criminal probe of prominent cryptocurrency exchange Binance.

In his piece, “If Binance Criminally Charged, Crypto Exchanges May Exit US,”  St. Laurent writes that exchanges with poorly managed know-your-customer (KYC) and anti-money laundering protocols could be particularly vulnerable to criminal sanctions and should watch any DOJ action against Binance and its founder, Changpeng Zhou, very closely.

Why? Because if the DOJ successfully indicts Zhou and Binance, which holds $2.2 billion in U.S. customer assets and is a popular launchpad for many crypto startups, exchanges could face millions in fines for violating federal AML/KYC regulations. In addition, its leaders could face decades in prison. It would also sow distrust in exchanges, as any action would potentially jeopardize the holdings of an exchange’s American users.

In his article, St. Laurent walks readers through how exchanges can mitigate their liability, including barring U.S. users, developing IP-address-checking and onboarding procedures that support a mens rea defense, seeking compliance opinion letters from U.S. attorneys, and more.

St. Laurent writes, “It is anyone's guess how the DOJ will decide to handle Binance. Regardless of the department's next steps, exchanges should plan accordingly and revisit their AML/KYC practices to ensure that they are positioned as best they can be to defend past practices or promise future compliance to DOJ and civil regulators.”

St. Laurent was part of the legal team defending former Coinbase product manager Ishan Wahi in SEC v. Wahi, which was among the first SEC actions to claim cryptocurrencies as securities. He is a first-chair trial lawyer who has tried more than 20 cases to verdict, from federal jury trials to FINRA, AAA and JAMS arbitrations, as well as numerous New York State court bench and jury trials. He regularly represents individuals and companies in criminal and regulatory matters. St. Laurent has been recognized as a Super Lawyer for ten years, from 2013-2022, and has been featured in numerous publications as a contributor. He is Chambers-ranked, as is Harris St. Laurent & Wechsler LLP, for white-collar criminal defense and government investigations in New York.