Published on: November 23, 2023
The cryptocurrency giant Binance and its CEO have pleaded guilty to violations of US anti-money laundering laws that will cost them more than $4 billion combined in fines.
The Justice Department announced Monday that the company’s fine is “one of the “largest corporate penalties in US history.” Binance Holdings Limited will enter several sanctions compliance and anti-money laundering programs, keep an independent monitor for the next three years, and report the suspicious transactions it processed.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed … ” said Attorney General Merrick B. Garland. “The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”
Its founder, Chengpeng Zhao, also known as “CZ,” will step down from his role as part of his plea and pay $50 million toward the settlement as well.
The deal ends a year-long probe into Binance’s actions, the world’s largest crypto exchange. The company admitted to failing to comply with US law in exchange for profit, including not registering with FinCEN, a bureau of the US Department of the Treasury, as a money services business and not maintaining an AML (anti-money laundering) program by skipping know-your-customer (KYC) protocols and not monitoring transactions.
The government says the company willfully ignored its obligations toward US law, which permitted unrestricted financial transactions to a plethora of bad actors, including cybercriminals, terrorists, and child abusers. The DOJ also accused Binance of profiting off numerous illicit transactions between US users and people in sanctioned nations like Cuba, Iran, Syria, and even Russian-controlled areas in Ukraine.
“Today’s historic penalties and monitorship to ensure compliance with US law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences,” Secretary of the Treasury Janet L. Yellen said in a statement.
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