A message to bad actors in the crypto industry!
Binance’s CEO, Changpeng Zhao, and the exchange pleaded guilty to federal charges, agreeing to pay over $4 billion in fines, as reported by Matt Egan, Evan Perez, Allison Morrow, Holmes Lybrand, Sean Lyngaas, and Bryan Mena, for CNN.
Binance, founded in 2017 by Zhao, a Canadian national, is the world’s largest crypto exchange, significantly larger than its rivals. Until recently, Binance held almost 60% of the market share for crypto spot trading.
Zhao will step down as CEO and pay $200 million in fines. The charges include anti-money laundering violations, unlicensed money transmitting, and sanctions violations.
The guilty plea is part of a coordinated settlement with various government agencies.
Binance allegedly allowed illicit transactions on its platform, leading to the largest-ever corporate resolution with criminal charges for an executive. Zhao faces a maximum of 10 years in prison and agreed to pay a $50 million fine. The settlement also requires Binance to pay substantial penalties and disgorgement of ill-gotten gains.
The company admitted to turning a blind eye to legal obligations, allowing funds to flow to terrorists, cybercriminals, and child abusers. Following the announcement, Zhao confirmed his resignation as CEO, succeeded by Richard Teng.
The alleged misconduct involved processing transactions for illicit activities, money laundering, and violating US economic sanctions. Prosecutors claim Binance prioritised growth and profits over compliance with US law. The charges spanned from August 2017 to at least October 2022.
The guilty plea is seen as a message to bad actors in the crypto industry, with US officials emphasising the need for compliance with US law in the crypto space.