The world’s largest crypto exchange Binance (CRYPTO: BNB), along with its CEO Changpeng Zhao, admitted guilt to federal charges Tuesday as part of a resolution with the U.S. Justice Department amounting to over $4 billion.
Binance conceded to violations related to the Bank Secrecy Act, unlicensed money transmitting and the International Emergency Economic Powers Act, the Justice Department said.
The company has agreed to a financial settlement exceeding $4 billion.
Binance CEO’s Admission, Resignation: Zhao, the Canadian founder of Binance, pleaded guilty to failing to maintain an effective anti-money laundering program in violation of the BSA.
Zhao has stepped down from his role as CEO of Binance.
Attorney General Merrick Garland said, “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 penalties in U.S. history.”
Using new technology for unlawful activities does not confer the status of a disruptor but that of a criminal, he said.
Yellen Says Binance Prioritized Profit Over The Law: Treasury Secretary Janet Yellen criticized Binance’s approach, saying, “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals and child abusers through its platform.”
She described the penalties and monitorship as a historic step for the virtual currency industry.
Deputy Attorney General Lisa Monaco said: “A corporate strategy that puts profits over compliance isn’t a path to riches; it’s a path to federal prosecution.”
She emphasized the clear message to crypto and defi companies about the necessity of obeying U.S. law.
Overview Of Binance’s Misconduct: Court documents indicate that since its inception in 2017, Binance has chosen to focus on growth and profits rather than complying with U.S. law.
Despite catering to U.S. customers, Binance did not register with FinCEN as a money services business and neglected to enact effective anti-money laundering measures.
This led to illegal transactions, including dealings with users in sanctioned regions such as Iran, Cuba, Syria and Russian-occupied areas of Ukraine.
Binance’s Future Compliance Obligations: Under the plea agreement, Binance is mandated to appoint an independent compliance monitor for three years and to improve its anti-money laundering and sanctions compliance programs, in addition to the financial penalties.
Produced in association with Benzinga
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