“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed — now it is paying one of the largest corporate fines in U.S. history,” U.S. Attorney General Merrick Garland said in a statement.
Binance CEO Zhao Changpeng has pleaded guilty and resigned. Photo: Reuters
The US Justice Department said Binance’s guilty plea was part of a coordinated action that included the Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control (OFAC).
Zhao pleaded guilty to failing to maintain an effective anti-money laundering program and resigned as CEO of the company, they said. Garland added that Zhao, who is Canadian and lives abroad, entered a plea in person in the United States. Court records show that Zhao agreed to pay a $50 million fine as part of the plea.
Binance’s settlements with U.S. Treasury agencies include a $3.4 billion civil fine and a $968 million OFAC-related penalty. “Binance turned a blind eye to its legal obligations in pursuit of profit,” U.S. Treasury Secretary Janet Yellen said.
She noted that Binance “deliberately weakened controls…”, allowing more than 1.5 million cryptocurrency transactions to violate U.S. sanctions and failing to report suspicious transactions. The penalties and five-year monitoring period imposed on Binance, she said, mark a “significant milestone for the cryptocurrency industry.”
The US Treasury Department said Binance's violations included failing to prevent and report transactions with groups such as the Islamic State (IS) in Iraq and Syria, as well as transactions between US users and those in Iran and North Korea, countries subject to US sanctions.
Binance was founded in 2017 and has dominated the cryptocurrency exchange market, making Zhao a billionaire almost overnight. The network operates cryptocurrency exchanges and provides other services around the world. The exchange has been severely weakened by the incident and the collapse of the cryptocurrency market.
Zhao is considered the biggest rival to FTX founder Sam Bankman-Fried and will also be sent to prison. Bankman-Fried has just been convicted of fraud and could face decades in prison.
Binance was founded in China, but Zhao later moved his business internationally after Beijing clamped down on the cryptocurrency sector.
The volatile industry exploded in 2021 and pushed its valuation past $3 trillion last year, but it has weakened significantly in recent times.
Bui Huy (according to AFP, CNA, Reuters)
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