Binance, the world’s largest cryptocurrency exchange, entered into a plea agreement with the United States Department of Justice on Tuesday, ending a lengthy federal money laundering investigation into the platform.
Company leadership has agreed to pay more than $4 billion in fines, while founder and CEO Changpeng Zhao will resign and plead guilty to violating the Bank Secrecy Act.
After its founding in 2017, Binance grew to be one of the largest exchange platforms in the crypto market, followed closely by now-defunct exchange FTX — and much like its competitor, Binance has been mired in suspicion and accusation for years.
(RELATED: FTX Founder Sam Bankman-Fried Convicted of Fraud)
Department of Justice prosecutors requested internal records disclosing the company’s efforts to prevent money laundering on the platform in December 2022. In June 2023, the Securities and Exchange Commission filed a civil case against Binance, accusing its management of using it to evade US securities laws.
Additional cases brought by other federal departments accused the Binance of failing to implement safeguards against illicit transactions, allowing funding for narcotics sales, sex trafficking, and even terrorism from groups like Hamas and al-Qaeda to be funded through the exchange.
Learn the benefits of becoming a Valuetainment Member and subscribe today!
After a years-long investigation, Zhao and his company finally reached an agreement with prosecutors that will allow continued operations. According to the agreement, Binance will pay a series of fines totaling $4.3 billion for violating U.S. anti-money laundering law, a conspiracy charge, and violating the International Emergency Economic Powers Act. This payment will include settlements for the pending civil litigations.
Zhao will personally plead guilty to causing a financial institution to violate the Bank Secrecy Act and pay a $50 million criminal fine, which may be reduced based on sums paid to the Commodity Futures Trading Commission. As a further condition of the agreement, Zhao will step down as CEO and be barred from any future involvement in the exchange platform.
In an X post after the court proceedings on Tuesday, Zhao said “I want to take responsibility and close this chapter in my life.”
Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.
Binance is no longer a baby. It is…
— CZ 🔶 Binance (@cz_binance) November 21, 2023
According to US Treasury Secretary Janet Yellen, Binance will now be subject to five years of monitoring and “significant compliance undertakings.”
Add comment