Binance, one of the world’s leading cryptocurrency exchanges, is set to completely withdraw from the U.S. market and pay a monumental $4.3 billion settlement, marking one of the largest corporate penalties in U.S. history. The settlement arises from a protracted criminal investigation by the Department of Justice (DOJ) into anti-money laundering (AML) and sanctions violations, implicating both the company and its CEO, Changpeng Zhao.
As part of the settlement, Binance forfeits over $2.5 billion and pays a $1.8 billion criminal fine. CEO Changpeng Zhao has stepped down after pleading guilty to AML violations and is personally liable for a separate $50 million fine. The settlement also mandates that Zhao refrains from any current or future involvement with the company for at least three years.
The charges against Binance assert that the exchange prioritized profits over legal compliance, allowing illicit funds related to terrorism, hacking, and other criminal activities to traverse the platform without detection. The DOJ revealed that Zhao was aware of the importance of U.S. users to Binance’s growth and revenue, yet failed to implement proper controls and compliance measures. The plea agreement highlights Zhao’s philosophy of “better to ask for forgiveness than permission,” emphasizing growth over compliance with U.S. law.
Attorney General Merrick Garland, in a press conference, emphasized the gravity of the charges and revealed internal communications where compliance officers at Binance made light of the exchange’s lax AML practices. The DOJ’s action seeks to convey a stern message that cryptocurrency exchanges serving U.S. customers must adhere to the law, with Garland stating, “Using new technology to break the law does not make you a disrupter. It makes you a criminal.”
The historic resolution underscores the DOJ’s commitment to combatting financial crimes in the cryptocurrency space and reinforces the imperative for industry participants to prioritize legal compliance over unchecked growth.
