The U.S. Department of Justice (DOJ) has alerted prosecutors handling cryptocurrency cases that Binance, the exchange responsible for approximately 39% of global spot trading volume in May, may become a less reliable partner in freezing and seizing illicit digital assets. An internal memo, written by DOJ digital currency counsel Rachel Jones and circulated in June, indicates that Binance intends to impose additional conditions before fulfilling such requests, potentially creating a significant obstacle for international enforcement.
According to The Information, which reviewed the memo, Binance is expected to halt “courtesy freezes” and instead require formal legal processes—such as requests under Mutual Legal Assistance Treaties (MLATs)—before deciding whether to freeze or seize specific assets. This shift could slow down investigations into hacking, ransomware, sanctions violations, and fraud, where rapid action is critical to securing movable cryptocurrency.
The trigger for the misunderstanding, Binance argues, lies in its licensing structure with the Abu Dhabi Global Market (ADGM), where regulatory oversight began on January 5, 2026. Official guidance from the ADGM Office of Data Protection suggests that exemptions for necessary disclosures “would not extend to cover requests from law enforcement agencies outside of the UAE,” potentially forcing international authorities to use MLAT procedures. However, the guidance also permits transfers required for “the establishment, exercise or defence of legal claims,” which Binance says allows continued voluntary cooperation. The exchange’s head of corporate communications stated that the company has reached out to both the DOJ and Abu Dhabi officials to clarify the situation, insisting: “We are not going to change in any way, shape or form, the way that we interact with law enforcement in America.”
These developments come at a sensitive time. Following Binance’s landmark $4.3 billion settlement in November 2023—over violations of the Bank Secrecy Act, operating an unlicensed money transmitting business, and sanctions breaches—the company agreed to three years of independent compliance monitoring and pledged to “cooperate fully” with U.S. and global authorities. Since then, however, the DOJ has rolled back several corporate monitoring programs, and Deputy Attorney General Todd Blanche’s April 2025 memo ended “regulation by prosecution” and shut down the National Cryptocurrency Enforcement Team. Concerns about compliance persist: reports note that the Cambodia-linked Huione Group moved $408 million through Binance in November 2025 while under monitoring, and Senator Richard Blumenthal has requested information on over $1 billion allegedly funneled via Binance to Iran-linked wallets.
Former DOJ Fraud Section official Scott Armstrong warned that the rumored policy changes would add “an additional and quite frankly unnecessary hurdle that is going to cause a lot of problems in the law enforcement community.” With two-fifths of centralized spot crypto trading flowing through Binance, any delay in cooperation could seriously impair cross-border asset recovery and complicate global crypto enforcement.
