The founder and CEO of Binance, Changpeng Zhao, has admitted to breaching U.S. anti-money laundering regulations and has stepped down from his role. This action follows a $4 billion deal with the U.S. Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC), and the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC). The charges brought against Binance and Zhao encompass infringements connected to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).
As part of the agreement, Binance has consented to forfeit $2.5 billion and pay a criminal fine of $1.8 billion, thus incurring a total financial penalty of $4.3 billion. Additionally, Binance has committed to retaining an independent compliance monitor for three years and bolstering their anti-money laundering and sanctions compliance protocols. In a parallel agreement, Zhao has agreed to a $50 million fine and is prohibited from any future involvement in Binance’s operations. The infractions attributed to Binance and Zhao are rooted in the company’s pursuit of expansion and financial gains at the expense of adherence to U.S. regulations, resulting in illicit funds reaching terrorists, cybercriminals, and perpetrators of child abuse through its platform.
This resolution draws a line under the Justice Department’s inquiry into Binance’s transgressions, marking a significant juncture for the digital currency sector. The imposition of penalties and a monitorship is designed to ensure alignment with U.S. laws and regulations.
