The world’s largest exchange for cryptocurrency and its CEO pleaded guilty on Tuesday to criminal charges in a deal resulting in billions in fines, according to the Wall Street Journal.
Changpeng Zhao, CEO of Binance, stepped down from his position after pleading guilty to criminal money laundering charges in a deal with the Department of Justice (DOJ) that could spare the company from being shut down by regulators, according to a press conference from the DOJ and the Treasury Department. Binance, which is majority-owned by Zhao, is facing its own charges of violating anti-money laundering laws and breaching international sanctions, according to the WSJ. (RELATED: Top Dem Donor And Alleged Fraudster Headed To Jail After Judge Revokes Bail)
“As CEO of Binance, Zhao willfully violated federal law that requires financial institutions to guard against money laundering and terrorist financing,” U.S. Attorney General Merrick Garland, said in the press conference. “From the very beginning, Zhao and other Binance executives engaged in a deliberate and calculated effort to profit from the U.S. market without implementing the controls that are required by U.S. law.”
Zhao will pay a criminal fine of $50 million in a deal with the DOJ that will spare Binance in a long-running criminal investigation into the company, according to the WSJ. Under the deal, Zhao will not be eligible to return to the company in an executive role for three years, but he can maintain majority ownership.
Binance has also pleaded guilty under the deal and will pay a fine totaling $4.3 billion, according to the WSJ. The DOJ’s charges allege that individuals in sanctioned countries like Iran and Russia were able to trade cryptocurrency with Americans on the exchange, violating U.S. restrictions.
“Either you have to centralized, you have to get out of the US or you have to shut down. Those are not great options and they totally undermine the whole point of crypto,” says SEC Commissioner Peirce of the lack of cryptocurrency regulation https://t.co/DpYHnT5eC1 pic.twitter.com/ln29uABHrZ
— Bloomberg Crypto (@crypto) November 21, 2023
The deal also settles a civil lawsuit from the Commodity Futures Trading Commission (CFTC), after the federal regulator claimed that Binance did not have safety measures in place to prevent and detect terrorist financing and money laundering, according to the WSJ. The CFTC alleges that Binance did not register with U.S. security regulators and was not permitted to provide certain trading services to Americans.
A jury found Sam Bankman-Fried, former CEO of FTX, another cryptocurrency exchange, guilty on fraud charges related to his company in early November. Bankman-Fried misappropriated and embezzled billions in funds from FTX for a number of different purposes, including political donations.
Federal regulators, including the U.S. Securities and Exchange Commission (SEC), have increasingly cracked down on cryptocurrency exchanges as the monetary medium gains popularity. Many exchanges, including the now-bankrupt FTX, operate outside of the U.S. and are resistant to U.S. regulators.
Binance and the DOJ did not immediately respond to a request for comment from the Daily Caller News Foundation.
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