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Binance Ends Courtesy Freezes; DOJ Warns of Slower Cooperation
The DOJ told prosecutors Binance will stop voluntary account freezes as of June 8, requiring formal MLAT requests that take weeks or months.
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The US Justice Department warned its crypto prosecutors last month that Binance would stop providing voluntary account freezes starting June 8, The Information reported Wednesday. DOJ Digital Currency Initiative counsel Rachel Jones said in an email that the exchange would instead require Mutual Legal Assistance Treaties, or MLATs, before freezing or seizing accounts.
Courtesy freezes let exchanges lock suspicious accounts within hours of a law enforcement or victim request, long before formal legal documents exist. MLATs can take weeks or months. The shift means hackers and sanctions evaders gain more time to move funds across chains and jurisdictions.
The report comes as Binance reportedly negotiates a formal end to the DOJ monitorship imposed after the company pleaded guilty in 2023 to violations of the Bank Secrecy Act. A separate Treasury monitorship stays in place. The Treasury monitor, Sharon Cohen Levin, held a town hall with Binance compliance staff, co-CEO Richard Teng, and new regulatory-adherence head Andrew Stemmer in June, The Information reported.
The change in policy affects how quickly law enforcement can freeze assets on the world's largest crypto exchange. Without courtesy freezes, prosecutors must route requests through formal treaty channels, a process that can stretch across weeks. That delay matters most in the first hours after a hack or theft, when stolen funds are still traceable.