Top Cryptocurrency Exchange CEO Admits Money Laundering Charges

Top Cryptocurrency Exchange CEO Admits Money Laundering Charges | Mr. Business Magazine

In a landmark development aimed at instilling order in the often-lawless cryptocurrency industry, billionaire Changpeng Zhao and Binance, the world’s leading cryptocurrency exchange, confessed to federal charges on Tuesday. The coordinated settlement with the federal government involves Binance agreeing to a substantial payment exceeding $4 billion in fines and penalties. Zhao, a key figure in the crypto sphere, has committed to stepping down as CEO, facing a $200 million fine.

Binance, accused of anti-money laundering, unlicensed money transmitting, and sanctions violations, has marked this admission as the largest-ever corporate resolution with criminal charges against an executive, as stated by US officials.

The investigation, spanning several years, alleges that Binance allowed illicit transactions on its platform, facilitating activities ranging from child abuse and narcotics to financing for terrorist groups like ISIS, Al Qaeda, and Hamas’s Al-Qassam Brigades.

Binance and Cryptocurrency

Changpeng Zhao, with a fortune exceeding $23 billion, admitted guilt for failing to maintain an effective anti-money laundering program. US authorities aim for the combined impact of Binance’s plea and the recent conviction of FTX co-founder Sam Bankman-Fried to send a clear message to wrongdoers in the cryptocurrency industry.

Attorney General Merrick Garland emphasized, “Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in US history.”

While Zhao faces a maximum 10-year sentence, federal guidelines suggest a likely lower term, around 18 months, subject to the judge’s discretion. In the proposed plea deal, Zhao is set to pay a $50 million criminal fine and $150 million in civil penalties, with Binance required to disgorge $1.35 billion of ill-gotten gains and pay a $1.35 billion civil monetary penalty to the CFTC.

Treasury Secretary Janet Yellen condemned Binance for disregarding legal obligations, allowing funds to flow to terrorists, cybercriminals, and child abusers.

Founder of Binance, world’s largest cryptocurrency exchange, pleads guilty to anti-money-laundering charge

Largest Enforcement Action

The guilty plea from Binance is part of a coordinated settlement involving multiple government agencies, including the Justice Department, FinCEN, OFAC, and the CFTC. The Treasury labeled the settlement as its largest enforcement action in history.

A senior Treasury official revealed, “The Binance platform was facilitating some truly horrible stuff – everything from terrorist financing to ransomware actions, child pornography and various scams and frauds.” US officials claim Binance permitted over 100,000 transactions involving illicit activity and 1.5 million virtual currency trades violating US sanctions.

Concurrent with the settlement announcement, Zhao confirmed his resignation as CEO on social media platform X (formerly Twitter), citing the decision as emotionally challenging but necessary to take responsibility for past mistakes. Richard Teng, Binance’s former global head of regional markets, will succeed Zhao.

“While Binance is not perfect,” the company stated, “it has strived to protect users since its early days as a small startup and has made tremendous efforts to invest in security and compliance. Binance grew at an extremely fast pace globally, and made misguided decisions along the way. Today, Binance takes responsibility for this past chapter.”

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