CRIME
Binance CEO Steps Down, Company To Pay $4 Billion For Money Laundering Charges
binance/Instagram
The billionaire founder and CEO of Binance, the world’s largest cryptocurrency exchange, is stepping down after both he and the company pleaded guilty to money laundering charges on Tuesday, the Department of Justice said.
Binance Holdings Limited, which operates Binance.com, has agreed to pay $4 billion after pleading guilty on Tuesday to violations related to the Bank Secrecy Act, the International Emergency Economic Powers Act, failure to register as a money transmitting business.
Binance founder and former CEO, Canadian national Changpeng Zhao, pleaded guilty to failing to maintain an effective anti-money laundering program, in violation of the Bank Secrecy Act, the Justice Department said.
“Binance became the worlds largest cryptocurrency exchange in part because of the crimes it committed — now it is paying one of the largest corporate penalties in U.S. history,” Attorney General Merrick B. Garland said in a statement. “Using new technology to break the law does not make you a disruptor, it makes you a criminal.”
Garland announced the enforcement at a press conference Tuesday alongside Treasury Secretary Janet Yellen.
“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” Yellen said in a statement.
“Todays historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences, Yellen said.
Binances and Zhaos willful violations of anti-money laundering and sanctions laws threatened the U.S. financial system and our national security, and each of them has now pleaded guilty. Make no mistake: when you place profits over compliance with the law, you will answer for your crimes in the United States, said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Departments Criminal Division
“Binances crimes gave sanctioned customers unfettered access to American capital and financial services,” said Assistant Attorney General Matthew G. Olsen of the Justice Departments National Security Division (NSD). “This prosecution is a warning that companies that do not build sanctions compliance into their services face serious criminal penalties, as do the executives who lead them.”
In a post on X, formerly Twitter, Zhao admitted he made mistakes and must take responsibility. He said he will be taking a break, and possibly taking up passive investing.
I cant see myself being a CEO driving a startup again. I am content being an one-shot (lucky) entrepreneur. Should there be listeners, I may be open to being a coach/mentor to a small number of upcoming entrepreneurs, privately, he wrote.
Zhao also announced his replacement. Binance’s former Head of Regional Markets Richard Teng has been named the new CEO.
Zhao closed by saying he is proud to point out that the government did not accuse Binance of misappropriating user funds, or manipulating markets.
TMX contributed to this article.
