US government, Binance He stated that the company’s founding CEO, Changpeng Zhao, pleaded guilty to one count of failing to prevent money laundering. The company will also pay a penalty of over 4 billion dollars. Following these developments, the CEO resigned as CEO and announced that Richard Teng was appointed in his place.
Binance admitted to violating the Bank Secrecy Act and flagrantly violating enforcement programs, including failing to implement reporting programs for suspicious transactions.
US Attorney General Merrick Garland, who described the agreement as one of the largest corporate penalties in the country’s history, drew attention with the comment: “Using new technology to break the law does not make you subversive, it makes you a criminal.”
As part of the settlement agreement, the US Treasury announced that Binance would be subject to five-year monitoring and “significant compliance commitments, including ensuring that the Company fully exits the United States.” As we reported as Koinfinans.com, the company is currently a limited company registered in the Cayman Islands.
Zhao was perhaps best known as the chief rival of Sam Bankman-Fried, the 31-year-old founder of FTX, which was the second-largest crypto exchange before it collapsed last November. Bankman-Fried was convicted earlier this month of fraud for stealing at least $10 billion from customers and investors.
Magistrate Judge Brian A. Tsuchida questioned Zhao to make sure he understood the agreement to which he pleaded guilty, saying at one point: “You knew you had no controls.” “Yes, your honor,” CZ replied.
Binance said in a statement that it had made “wrong decisions” as it rapidly grew to become the world’s largest crypto exchange, and that the agreement acknowledged its “responsibility for historical, criminal compliance violations.”
US Treasury Secretary Janet Yellen announced that Binance processed transactions from illicit actors and “supported activities ranging from child sexual exploitation to illicit drugs to terrorism in more than 100,000 transactions.” Yellen underlined that the exchange had not found a single suspicious activity report regarding these transactions and that the company had authorized more than 1.5 million virtual currency transactions in violation of US sanctions involving Hamas’ Al Qassam Brigades, Al Qaeda and other criminals.
Although CZ’s sentence was announced as February 23, 2024, the sentence is expected to be postponed. Experts in the region expect CZ to receive a prison sentence of up to 18 months.
One of his lawyers, Mark Bartlett, stated that Zhao had been aware of the investigation since December 2020 and that he surrendered voluntarily, even though the United Arab Emirates, where Zhao lives, does not have an extradition agreement with the United States. “He decided to come here and suffer the consequences,” Bartlett said. “He’s sitting here right now. “He admitted his guilt.”
Binance founder Zhao, who is married and has young children in the UAE, promised to return to the US for sentencing if he is allowed to stay there during this period.
Zhao has previously faced allegations that he diverted client funds, concealing the fact that the company shuffled billions of dollars of investor assets and sent them to a third party that Zhao also owned. Binance, on the other hand, was previously accused of operating as an unregistered securities exchange and violating a number of US securities laws in a lawsuit filed by regulators.