U.S. authorities say CEO Changpeng Zhao pleaded guilty to violating anti-money laundering laws.
Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, has resigned as CEO and pleaded guilty to violating anti-money laundering laws.
The settlement with the U.S. Department of Justice (DoJ) is part of a larger agreement involving several federal agencies and will include fees of more than $4 billion, the DoJ announced Tuesday.
The announcement is the latest blow to the cryptocurrency industry, which has been marred by a series of scandals and investigations that have uncovered fraudulent behavior by central players and companies.
Cryptocurrency is also under scrutiny as a tool used by illicit groups to circumvent global financial safeguards.
Zhao, a Canadian national, pleaded guilty to one count of failure to maintain an effective anti-money laundering program.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed. Today she is paying one of the heaviest penalties in American history,” said Attorney General Merrick Garland.
This month, Sam Bankman-Fried, the 31-year-old founder of FTX, the world’s second-largest cryptocurrency exchange, was convicted of fraud for stealing more than $10 billion from customers and customers. investors.
“Over the past month, the Department of Justice has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technologies to break the law does not make you a disruptor. It makes you a criminal,” Garland said.
Acting U.S. Attorney Tessa Gorman for the Western District of Washington said that because Zhao “knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between U.S. users and users from sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited from significant fees.”
Prosecutors said that as part of the settlement, Binance would pay fees of $1.81 billion, forfeiture of $2.5 billion and personal payments from Zhao of approximately $50 million.
Zhao’s plea agreement also prohibits him from any involvement in Binance, a Cayman Islands limited liability company.
The founder has previously been accused of embezzling client funds.
“Binance has turned a blind eye to its legal obligations in the pursuit of profit. His deliberate failures allowed money to flow to terrorists, cybercriminals and pedophiles through his platform,” said Treasury Secretary Janet Yellen. “Any institution, anywhere, that wishes to reap the benefits of the U.S. financial system must also follow the rules that protect us all from terrorists, foreign adversaries and crime, or face the consequences. »