Binance pleads guilty to financial crimes

by Jonathan Adams
Binance

The company as well as its CEO and founder, Changpeng Zhao, agreed they breached the law by failing to maintain an effective anti-money laundering program, according to the Justice Department

Binance, the operator of the world’s biggest crypto currency exchange, pleaded guilty Tuesday to multiple financial crimes and agreed to pay nearly $4.3 billion, the Justice Department (DoJ) announced.

The company as well as its CEO and founder, Canadian national Changpeng Zhao, agreed they breached the law by failing to maintain an effective anti-money laundering program, according to the DoJ. Binance also pleaded guilty to failing to register as a money transmitting business and to breaching the International Emergency Economic Powers Act, and Zhao has resigned as CEO.

The developments come just weeks after the department secured a conviction against SBF, the founder of crypto currency exchange FTX, for committing fraud through a scheme that defrauded customers and investors of at least $10 billion.

In a Tuesday statement, Binance said the resolutions “acknowledge our company’s responsibility for historical, criminal compliance violations, and allow our company to turn the page on a challenging yet transformative chapter of learning and growth.” It announced its former Global Head of Regional Markets, Richard Teng, was replacing Zhao as Chief Executive Officer.

The case against Binance focused on the firm’s failure to implement an effective program that was reasonably designed to prevent it from being used to facilitate money laundering. The DoJ alleged that the firm tried to keep “VIP” U.S. customers even after announcing in 2019 that it would block them, including by helping them register offshore entity accounts and encouraging them to provide information that indicated they were outside the U.S.

Binance prioritized its profits over the safety of the American people, said Attorney General Merrick Garland in a Tuesday press conference announcing the guilty pleas.

The message here should be clear, he added. Using new technology to violate the law does not make you a disrupter; it makes you a criminal.

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