Binance chief executive Zhao Changpeng pleaded guilty on Tuesday (Nov 21) to US money laundering violations, in a deal that will see the company he founded pay a US$4.3 billion settlement resolving a years-long probe into the world’s largest crypto exchange.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – no
Binance’s guilty plea is part of coordinated action including with the Treasury Department’s Financial Crimes Enforcement Network and Office of Foreign Assets Control (OFAC), the Department of Justice said.
Zhao pleaded guilty to failing to maintain an effective anti-money laundering program, the Department of Justice said, and he has resigned from his position as CEO.
Zhao, who is Canadian and lives abroad, entered his plea in person in the United States, added Garland.
Court documents showed Zhao agreed to pay a US$50 million fine as part of the plea.
Binance’s agreements with the Treasury Department’s agencies include a civil money penalty of US$3.4 billion and a US$968 million penalty involving OFAC. These mark the agencies’ largest settlements in history.
w it is paying one of the largest corporate penalties in US history,” Attorney General Merrick Garland said in a statement.
“Binance turned a blind eye to its legal obligations in the pursuit of profit,” Treasury Secretary Janet Yellen said in a statement.
“Its willful failures allowed money to flow to terrorists, cybercriminals and child abusers through its platform.”
She noted Binance “deliberately undermined its own sanctions monitoring controls”, allowing over 1.5 million virtual currency trades violating US sanctions, and failed to report suspicious transactions.
Yellen said the penalties, and a five-year monitorship imposed on Binance, mark a “milestone for the virtual currency industry”.
Moving forward, Binance must file suspicious activity reports required by law, on top of reviewing past transactions to report such activity to authorities, Garland said.
“This will advance our criminal investigations into malicious cyber activity and terrorism fundraising, including the use of cryptocurrency exchanges to support groups such as Hamas,” he added.
Binance was created in 2017 and cornered much of the crypto-trading market, turning Zhao into a billionaire.
Binance runs crypto exchanges and provides other services across the world, but it has taken a severe hit since crypto markets collapsed and regulators began probing the legality of its business.
Zhao – often seen as the archrival of disgraced FTX founder Sam Bankman-Fried – is expected to face sentencing at a later time.
Agencies
