December 7, 2023

Court Approval Granted for Binance, CZ, and US Department of Justice Settlement

A U.S. district judge has sanctioned the plea agreements reached between Binance, former CEO Changpeng Zhao, and the Department of Justice.

Binance, the operator of the world's largest cryptocurrency exchange, Binance.com, has entered a guilty plea, resolving the Justice Department's investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitter, and breaches of the International Emergency Economic Powers Act (IEEPA). The company has committed to paying over $4 billion to settle these charges.

Changpeng Zhao, the Canadian founder and CEO of Binance, was found culpable for neglecting to implement a comprehensive anti-money laundering (AML) program, a violation of the BSA. Consequently, he has resigned as Binance CEO.

Zhao is set to be sentenced on Feb. 23, 2024 and faces up to 18 months in prison. He’s currently released on a $175 million bond, which would have allowed him to return to the United Arab Emirates, where he resides.

However, federal prosecutors have objected to allowing Zhao to leave the U.S., saying they “would not be able to secure his return” if he decided not to return, as the UAE has no extradition treaty and Zhao could live there indefinitely on his wealth.

Zhao has opposed the travel block, saying he "poses no risk of flight", arguing he took responsibility for his actions by flying from the UAE to the United States.

Court documents reveal Binance's admission that it prioritized growth and profits over compliance with U.S. laws. Since its inception in 2017, Binance concentrated on attracting high-volume customers, including those based in the U.S., rapidly becoming the world's largest cryptocurrency exchange. The majority of its clientele originated from the USA.

Due to its service to U.S. customers, Binance was obligated to register with FinCEN as a money services business and establish an effective AML program designed to prevent the facilitation of money laundering, as outlined in the court documents.

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