Binance Faces One of the Largest Sanctions in US History with a $1.8 Billion Criminal Fine Plus $2.5 Billion Confiscated
Binance is being pushed out of the US market and will be monitored by regulators for at least 5 years.
CZ pleads guilty and agrees to step down from the company in addition to a $50 million fine.
Binance Is Pushed Out of the US Market
Binance will exit the US market and pay a $4.3 billion settlement – one of the largest fines ever imposed on a company in US history – to resolve violations related to anti-money laundering and sanctions, the Department of Justice announced today.
The departure from the US territory and the sanction are the result of a years-long criminal investigation into the company and its executives. CEO Changpeng Zhao also resigned after pleading guilty to money laundering offenses and agreeing to pay a separate $50 million fine.
The settlement also prohibits CZ from any present or future involvement in the company for at least three years, according to the terms of the plea agreement.
According to the charges, Binance prioritized profits over legal compliance by serving US customers without adequate checks. This allowed funds related to terrorism, hacking, and other crimes to flow through Binance undetected.
Attorney General Merrick Garland said that conversations obtained during the investigation show that the company’s compliance officials joked about hanging a banner that read: ‘Is laundering drug money too hard these days? Come to Binance. We have cake for you.’
According to the Justice Department, Binance also failed to halt over $898 million in illegal transactions between US users and users from sanctioned countries, such as Iran. As part of the plea agreement, over $2.5 billion from Binance has been confiscated and the exchange has paid a criminal fine of $1.8 billion.
CZ Pleads Guilty
CZ’s individual plea deals with the lack of anti-money laundering controls on the exchange and violations of the Bank Secrecy Act, similar to the charges for which BitMEX founder Arthur Hayes pleaded guilty last year. Hayes paid a criminal fine of $10 million and avoided prison, instead being sentenced to two years of probation.