The mechanics of Binance DOJ courtesy freezes are now the subject of internal U.S. government guidance, after a memo warned federal prosecutors to expect a more formal process when seeking account holds or crypto seizures involving the exchange from 8 June.
Unchained Crypto reported that Rachel Jones, counsel at the DOJ’s Digital Currency Initiative, sent an email to prosecutors stating that Binance would stop providing courtesy freezes and would instead require Mutual Legal Assistance Treaty (MLAT) requests or other formal legal steps before acting on some account holds or seizures.
Binance flatly rejected the characterisation. A spokesperson said: ‘There has been and will be no change to Binance’s cooperation with U.S. law enforcement.’ The exchange added it is actively looking at ways to increase cooperation and will continue responding to valid requests tied to active investigations.
What a Shift from Courtesy Freezes to MLATs Actually Means
Courtesy freezes are informal temporary holds that exchanges can apply before full legal paperwork arrives. In crypto crime investigations they are operationally critical: stolen funds can traverse multiple wallets, bridge to other chains, or hit a mixer within minutes of leaving the victim’s address.
MLATs provide stronger legal cover in cross-border cases, but they require government-to-government coordination and can take weeks or months. For investigators chasing funds in real time, that gap is the difference between recovery and a cold trail.
The DOJ memo did not describe a specific refused request. It laid out internal guidance on how prosecutors should prepare requests involving Binance going forward, effectively signalling that the informal fast-track route may no longer be reliable.
Binance’s Law Enforcement Request System (LERS), hosted on the Binance law enforcement portal via the Kodex Global platform, allows global agencies to register and submit requests, with access typically approved within three business days. For Binance to hand over user data in an active criminal investigation, its own guidelines require a valid court order from a competent jurisdiction or a police warrant.
Binance.US, which operates as a legally separate entity under BAM Trading Services, Inc., runs its own process and only accepts grand jury subpoenas, court orders, search warrants, and seizure warrants from verified government email domains.
Binance DOJ Courtesy Freezes in Context of the 2023 Settlement
The backdrop to all of this is Binance’s criminal resolution from November 2023. The DOJ’s case page confirms Binance pleaded guilty on 21 November 2023 to conspiracy to violate the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and violating the International Emergency Economic Powers Act (IEEPA).
The financial penalties were structured across multiple regulators. According to Reed Smith’s settlement analysis, FinCEN assessed a civil money penalty of $3.4 billion and imposed a five-year monitorship requiring Binance’s complete exit from the U.S. market. OFAC assessed a separate penalty of $968 million, with Binance required to maintain full sanctions compliance obligations under the same monitorship. Those two figures combine to exceed the $4.3 billion headline total cited by the DOJ.
Reed Smith also noted that former Binance chief compliance officer Samuel Lim agreed to pay $1.5 million to the CFTC for ignoring potential money laundering and terrorist financing on the platform and for failing to register with the regulator.
Unchained Crypto further reported that Binance is currently negotiating a formal end to the DOJ monitorship. That context makes the courtesy freeze question more pointed: a company trying to exit monitorship that simultaneously appears to be tightening its informal cooperation posture creates a political optics problem, whatever the legal justification.
Binance has cited compliance investment as evidence of good faith, spending roughly $300 million annually on compliance and handling more than 313,000 law enforcement requests globally. The exchange previously stated that authorities seized more than $752 million in assets with its assistance over three years.
Whether prosecutors find those figures reassuring depends on whether the informal fast-track access they relied on for time-sensitive Binance DOJ courtesy freezes survives the shift to a more formalised process. The monitorship negotiation timeline is the next hard data point to watch.
