cryptointelligence.co.uk
The CEO of Binance, Changpeng “CZ” Zhao, is set to plead guilty to a felony charge as part of a settlement reached with the United States Department of Justice.
This agreement resolves both criminal and civil cases involving the cryptocurrency exchange.
Attorney General Merrick Garland made the announcement during a press conference on November 21st, revealing that CZ appeared in person in a U.S. federal court, despite residing outside the country.
The settlement, valued at $4.3 billion, will address “civil regulatory enforcement actions” involving various government departments, including the U.S. Treasury and Commodity Futures Trading Commission (CFTC).
Garland accused Binance of allowing criminals engaged in illicit activities to use the platform to move “stolen funds.”
He claimed that the exchange had only pretended to comply with U.S. federal laws by providing certain users with access to Binance, despite their connections to illicit funds.
As part of the settlement, Binance will be subject to monitoring, reporting requirements, and the filing of suspicious activity reports for past transactions.
Garland criticized Binance for prioritizing profits over the safety of the American people, stating, “Using new technology to break the law does not make you a disruptor — it makes you a criminal.”
READ MORE: National Bank of Cambodia Teams Up with Alipay to Enable Cross-Border Transactions
Treasury Secretary Janet Yellen announced that Binance would pay over $3.4 billion in penalties to the Financial Crimes Enforcement Network and approximately $1 billion to the Treasury’s Office of Foreign Assets Control. CFTC Chair Rostin Behnam disclosed that Binance would pay $2.7 billion in civil monetary penalties and disgorgement, while CZ would pay $150 million.
Former compliance chief Samuel Lin would also contribute $1.5 million to the proposed settlement, with the Justice Department crediting approximately $1.8 billion toward these resolutions.
In response to the settlement, Binance released a blog post on November 21st, expressing their satisfaction with reaching a resolution with U.S. authorities. They emphasized their commitment to user security and safety.
CZ announced his resignation as CEO, with Richard Teng, Binance’s global head of regional markets, taking over the position. CZ acknowledged his mistakes and expressed his belief that stepping down was in the best interest of the Binance community and himself.
He also asserted that Binance had not misappropriated user funds or engaged in market manipulation.
The indictment against CZ, filed under seal on November 14th, charged him with failing to maintain an effective Anti-Money Laundering program at the crypto exchange, in violation of the Bank Secrecy Act.
Court records related to charges against Binance and CZ remained sealed from November 14th to 21st.
While this settlement resolves many of the civil and criminal investigations into Binance, the exchange still faces a pending civil case with the U.S. Securities and Exchange Commission, which filed charges for securities law violations in June.
Discover the Crypto Intelligence Blockchain Council