Binance’s Abu Dhabi License Complicates DOJ Asset Freeze Requests

Published by James Harris on July 9, 2026July 9, 2026

The DOJ’s internal memo about Binance, obtained by The Information, describes a specific and operational problem: prosecutors handling cryptocurrency cases were told in June that Binance may begin adding conditions before fulfilling requests to freeze or seize customer assets. For law enforcement agencies that have come to rely on Binance’s direct cooperation as a first-response tool in tracking illicit funds, that shift, even a partial one, has real consequences.

Binance disputes the characterization entirely. In an interview with BeInCrypto, the company’s head of corporate communications attributed the confusion to DOJ officials misreading Binance’s obligations under its Abu Dhabi Global Market license, which came into effect on January 5, 2026. The official guidance from the ADGM Office of Data Protection states that data disclosure exemptions “would not extend to cover requests from law enforcement agencies outside of the UAE,” which Binance says simply means foreign agencies should route requests through formal Mutual Legal Assistance Treaty channels rather than rely on informal voluntary freezes. Binance insists this doesn’t change its cooperation with American law enforcement in any meaningful way.

What the 2023 Settlement Actually Required

The backdrop matters here. In November 2023, Binance accepted its guilt on violations of the Bank Secrecy Act, including operating an unauthorized money transmitting business and sanctions violations, and agreed to pay more than $4.3 billion in penalties. The plea agreement included an explicit commitment to “cooperate fully” with law enforcement in the United States and globally, alongside three years of independent compliance monitoring.

That monitoring, it turns out, has been significantly wound down. The memo issued by Deputy Attorney General Todd Blanche in April 2025 ended what it called “regulation by prosecution” of digital assets and dissolved the National Cryptocurrency Enforcement Team. The DOJ has suspended many of its corporate monitoring programs more broadly. The settlement’s teeth have been quietly pulled.

This is where the Binance story intersects a larger structural problem. The 2023 agreement was designed to create a period of supervised cooperation precisely because informal cooperation was the operational norm. Strip away the formal oversight, and the informal cooperation becomes the only mechanism left. If Binance now requires MLAT requests before acting on some asset freezes, those processes take weeks or months, not hours. In crypto, that latency is the difference between recoverable funds and gone ones.

The Regulatory Vacuum Taking Shape

Binance accounts for roughly 39% of global spot cryptocurrency trading volume as of May, which means its compliance posture is not a niche concern. When investigators need to freeze assets moving through multiple exchanges, a less responsive Binance slows the entire chain. The exchange has previously been described as an essential partner in recovering funds tied to hacking, ransomware, sanctions evasion, and fraud. That role is not easily replaced by a competitor exchange.

The timing is uncomfortable. A more aggressive regulatory posture toward crypto trading in other jurisdictions has already demonstrated how compliance friction affects market behavior. Here, the friction is running in the opposite direction: U.S. enforcement capacity is contracting at the same moment Binance’s formal monitoring obligations are expiring and its licensing structure is shifting to a jurisdiction with stricter privacy rules.

Binance’s spokesperson stated plainly that “there has been and will be no change to Binance’s cooperation with U.S. law enforcement.” That may be true in intent. But the memo reportedly written by DOJ digital currency counsel Rachel Jones and circulated to prosecutors handling active cases suggests the practical reality on the ground is already being read differently by the people who depend on that cooperation to do their jobs. The gap between Binance’s stated position and what federal prosecutors believe they can rely on is itself the problem, regardless of which side has the better reading of the Abu Dhabi licensing rules.