- Binance agrees to pay $4.3 billion, comprising a $1.8 billion fine, a $2.5 billion forfeiture, and a $50 million fine for Changpeng Zhao personally
- Binance admits guilt to violations of the BSA and the IEEPA
- Binance commits to implementing crucial reforms in its AML and sanctions compliance programs. This includes hiring additional compliance staff, conducting more thorough customer reviews, and implementing enhanced monitoring systems
- Zhao steps down as CEO of Binance, with discussions underway for Richard Teng, the current Head of Regional Markets outside the U.S., to assume the leadership position
Changpeng Zhao, the Founder and CEO of Binance, the world’s largest cryptocurrency exchange, stepped down and pleaded guilty to criminal charges as part of a historic $4.3 billion settlement with the United States Department of Justice (DOJ).
The settlement follows a lengthy investigation into Binance’s alleged violations of anti-money laundering (AML) laws and failure to register as a money transmitting business.
As part of the plea agreement, Zhao admitted to the failure to maintain an effective AML program, a violation of the Bank Secrecy Act (BSA). In addition to stepping down from his role, Zhao will pay a personal fine of $50 million and cooperate with the ongoing DOJ investigation into Binance.
The settlement includes Binance itself pleading guilty to violations of the BSA and the International Emergency Economic Powers Act (IEEPA). The company will pay $1.8 billion fine and implement comprehensive reforms to its AML and sanctions compliance programs.
This settlement represents the largest ever imposed on a cryptocurrency exchange, signaling a significant escalation of the government’s efforts to regulate the cryptocurrency industry. The impact of this decision is expected to reverberate throughout the industry, prompting other exchanges to strengthen their AML and sanctions compliance programs.
Binance is also set to announce members of a new board to oversee the company’s governance. The company will submit to a U.S.-based third-party monitor as part of the settlement, adding an extra layer of oversight.
Forbes initially reported Zhao’s discussions with the DOJ to cede his role, marking a significant victory for the government and a substantial setback for the cryptocurrency industry. This settlement highlights the government’s vigilant approach to scrutinising the cryptocurrency sector and taking decisive action against companies found in violation of the law.
Author
