On Tuesday, Binance CEO Changpeng Zhao pleaded guilty to US money laundering violations. The cryptocurrency exchange he founded is obligated to pay over $4 billion in penalties under the terms of the agreement.
‘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,’ Attorney General Merrick Garland said in a statement.
The Department of Justice clarified that Binance’s guilty plea is part of a coordinated effort, inclusive of collaboration with the Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control (OFAC).
The Department of Justice reported that Zhao admitted guilt for not maintaining an effective anti-money laundering program, leading to his resignation from the CEO position.Garland added that Zhao, a Canadian residing abroad, entered his plea in person in the United States.
According to court documents, Zhao has agreed to a $50 million fine as part of the plea.
The agreements between Binance and the Treasury Department’s agencies encompass a civil money penalty of $3.4 billion and a $968 million penalty associated with OFAC. These settlements represent the largest in the history of the agencies.
‘Binance turned a blind eye to its legal obligations in the pursuit of profit,’ Treasury Secretary Janet Yellen said in a statement.
‘Its willful failures allowed money to flow to terrorists, cybercriminals and child abusers through its platform.’
She noted Binance ‘deliberately undermined its own sanctions monitoring controls,’ allowing over 1.5 million virtual currency trades violating US sanctions, and failed to report suspicious transactions.
Yellen said the penalties, and a five-year monitorship imposed on Binance, mark a ‘milestone for the virtual currency industry.’