DOJ Memo Puts Binance Freeze Policy Back in Spotlight

DOJ memo raises questions about Binance’s freeze practices

A recently reported Justice Department memo has renewed scrutiny of how Binance, the world’s largest cryptocurrency exchange, cooperates with U.S. law enforcement. According to The Information, DOJ staff were told to expect slower responses from Binance on some requests to freeze accounts or seize crypto assets abroad starting June 8. The notice — if accurate — highlights tensions between quick, operational steps investigators rely on and formal international legal processes.

What the memo reportedly says

The memo reportedly advised prosecutors that Binance might no longer provide certain short-term, informal account freezes — often called courtesy freezes — without formal legal requests such as Mutual Legal Assistance Treaty (MLAT) submissions. Courtesy freezes are temporary holds that exchanges can place on suspect accounts while legal paperwork is prepared. By contrast, MLATs and other formal processes involve government-to-government cooperation and typically take longer.

Binance denies changing its cooperation policy

Binance has denied the report and told U.S. authorities and the public it has not altered how it handles law enforcement requests. A company spokesperson reiterated that there has been no change to Binance’s cooperation with U.S. law enforcement and said the exchange is exploring ways to increase collaboration. Binance points to its Law Enforcement Request System and public guidance that explains how agencies can submit requests and how Binance evaluates them under applicable law and its terms.

Compliance credentials cited by the exchange

The company has repeatedly emphasized investments in compliance — claiming around $300 million in annual spending on compliance work — and says it has handled more than 313,000 requests from law enforcement worldwide. Binance also cites past cooperation it says enabled seizures of hundreds of millions of dollars in illicit funds. These figures and the firm’s public statements are part of its effort to rebuild trust following intense U.S. scrutiny.

Why quick freezes matter in crypto investigations

Crypto investigators say speed matters because stolen funds can be moved across wallets, mixed, or laundered through decentralized services in minutes. Rapid, temporary holds on exchange accounts are a primary tool to stop suspects from cashing out or obfuscating transaction trails. If exchanges require MLATs or equivalent formalities instead of courtesy freezes, prosecutors worry the added delay could reduce the chance of recovering assets in fast-moving crypto crime cases.

MLATs vs. courtesy freezes

MLATs provide robust legal cover for cross-border evidence gathering and asset seizure but involve diplomatic and bureaucratic steps that can slow the process. Courtesy freezes offer an interim measure that doesn’t replace formal legal orders but can preserve assets while prosecutors prepare paperwork. The reported DOJ guidance appears aimed at ensuring requests are properly documented — but it also signals prosecutors should prepare for slower, more formal processes in some cases.

Context: the 2023 settlement and ongoing oversight

This development comes against the backdrop of Binance’s 2023 U.S. criminal settlement, in which the exchange pleaded guilty to anti-money laundering, unlicensed money transmission, and sanctions-related charges and agreed to more than $4.3 billion in penalties. That settlement mandated stronger compliance, independent monitoring, and closer scrutiny by U.S. regulators — factors that continue to shape how officials and lawmakers evaluate Binance’s internal controls.

Implications for investigators and the crypto ecosystem

For prosecutors and investigative teams, the core question is whether informal, rapid cooperation from major exchanges will remain available when timing is critical. For Binance, the issue revolves around credibility after years of legal pressure and whether the exchange can convincingly demonstrate retooled compliance. For the broader crypto ecosystem, any long-term move toward formalized, slower processes could change how quickly illicit proceeds are traced and recovered — and could influence where criminals try to move funds.

Looking ahead

Binance denies a policy shift but the reported DOJ memo has already prompted law enforcement to reassess how to prepare requests involving the exchange. As regulators, prosecutors and exchanges try to balance speed, legality and cross-border cooperation, outcomes will shape asset recovery in crypto crime cases and the operational expectations for centralized exchanges. Investigators and market participants will be watching whether Binance’s public claims of continued cooperation match actions on the ground and whether new processes will preserve the ability to freeze and recover assets in real time.