Original - Odaily
Author - jk
On Tuesday, November 21, local time in the United States,Binance and its CEO Changpeng Zhao (CZ) pleaded guilty to criminal charges of anti-money laundering and violating U.S. sanctions and reached a settlement with U.S. regulators. As part of the settlement, Binance agreed to plead guilty and pay a fine of more than $4 billion. Changpeng Zhao agreed to resign and pay a $50 million fine while pleading guilty in a Seattle court on Tuesday.
The settlement negotiated by the parties will resolve all allegations of criminal misconduct,The settlement formally ends a years-long investigation by the U.S. Department of Justice into Binance. Agencies involved in the settlement include the U.S. Department of the Treasury, the U.S. Department of Justice, the U.S. Office of Foreign Assets Control and the U.S. Commodity Futures Trading Commission, among others.
According to Bloomberg News, in a document made public on Tuesday, Binance was accused of three crimes, includingMoney laundering violations, conspiracy to operate an unlicensed money transmission business, and violations of U.S. sanctions. According to the U.S. Treasury Department, Binance’s violations include failing to block and report suspicious transactions with terrorist groups, including Hamas’ Al-Qassam Brigades, Palestinian Islamic Jihad, al-Qaeda, and the Islamic State in Iraq and Syria. The announcement comes as Israel and Hamas are embroiled in a war that broke out more than six weeks ago. According to court documents, Binance allowed at least 1.1 million transactions worth more than $898 million related to Iranian customers.
The fine will be divided among the U.S. Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC) and other agencies. That includes $3.4 billion to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and $968 million to its Office of Foreign Assets Control,This was due to breaches of the Bank Secrecy Act and sanctions.
Official statement from Binance and US regulators
Binance issued a statement today saying, “Today we are pleased to report that we have reached resolutions with the U.S. Department of Justice, the Commodity Futures Trading Commission, Office of Foreign Assets Control, and the Financial Crimes Enforcement Network regarding their investigations into historical registration, compliance, and sanctions issues.These solutions acknowledge our company’s responsibility for historical criminal compliance violations and allow our company to begin a challenging yet transformational new chapter of learning and growth. With our compliance and governance enhancements solidified in our commitment, we can begin to share Binance’s exciting future vision and the future of the crypto industry. We are confident that Binance will lay the foundation for the next 50 years as a stronger company.
At the same time, the announcement issued by Binance specifically emphasized, We always adhere to the core values of user safety and security. We take our custodian responsibilities very seriously and provide 1:1 support for each users assets. * This Meaning that users can withdraw 100% of their assets from the platform at any time. It is worth noting that in our solution with US institutions, they:
There is no accusation that Binance misappropriated any user funds, and
There are no accusations that Binance engaged in any market manipulation.
A related announcement from the U.S. Treasury Department stated that the historic $3.4 billion settlement by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is the largest fine in the history of the U.S. Treasury Department and FinCEN. “FinCEN’s settlement includes a $3.4 billion civil penalty, adds five years of supervision, and requires significant compliance commitments, including ensuring that Binance completely exits the U.S. market. OFAC’s settlement includes a $968 million penalty , and requires Binance to comply with a series of strict sanctions compliance obligations, including fully cooperating with regulations overseen by FinCEN. To ensure that Binance fulfills the terms of its settlement agreement - including not providing services to U.S. persons - and to ensure that illegal activities are addressed, The Treasury Department, through the regulator, will retain access to Binance’s books, records, and systems for a period of five years. Failure to meet these obligations could subject Binance to significant additional fines, including a $150 million moratorium, if the Any failure to comply with the terms of the required compliance commitments and regulations will result in fines that will be collected by FinCEN.
U.S. Treasury Secretary Janet Yellen said: Binance turned a blind eye to its legal obligations in its pursuit of profits. Its willful failure allowed funds to flow through its platform to terrorists, cybercriminals and child abusers. She said: Today’s historic fine and regulation to ensure compliance with U.S. laws and regulations mark a milestone for the virtual currency industry.Any institution, regardless of location, that wants to benefit from the U.S. financial system must also abide by the rules that protect us from terrorists, foreign hostile powers, and criminality, or face the consequences.
CZs successor Richard Teng
CZ also released an open letter today through the X platform. The letter reads:
Today, I resigned as CEO of Binance. Granted, letting go emotionally isn’t easy. But I know its the right thing to do. I made a mistake and I must take responsibility. This is what’s best for our community, for Binance, and for myself. Binance is no longer a baby, it’s time to let it walk and run on its own. I know Binance will continue to grow and excel based on its deep foundation.
Im happy to announce,Our current head of global regional markets, Richard Teng, was today appointed as Binance’s new CEO.Richard is a highly qualified leader with over three decades of financial services and regulatory experience who will guide the company into its next phase of growth. He will ensure Binance delivers on our promises in the next phase of security, transparency, compliance, and growth.Prior to joining Binance, Richard was CEO of the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM); Chief Regulatory Officer of the Singapore Exchange (SGX); and Head of Corporate Finance at the Monetary Authority of Singapore.With Richard and the entire team, I believe great days are ahead for Binance and the crypto industry.
What will I do next? Ill take a break first. I haven’t had a true (phone off) day off in the past six and a half years. After that, my current thoughts are,I might do some passive investing and become a minority token holder/shareholder in startups in the blockchain/Web3/DeFi, AI, and biotech space. I’m excited to finally have more time to focus on DeFi.
His successor Richard Teng also issued an open letter:
We operate the worlds largest cryptocurrency exchange by trading volume. The trust placed in us by our 150 million users and thousands of employees is a responsibility I take seriously and value. With the support of CZ and our leadership team, I accept this role so that we can continue to meet and exceed the needs of our stakeholders. expectations while achieving our core mission——monetary freedom. The foundation that Binance rests on today is stronger than ever.
My focus will be:
Assure users that they can continue to have confidence in the financial strength, safety and security of the company;
Work with regulators to uphold high standards globally that promote innovation while providing important consumer protections;
Work with partners to drive the growth and adoption of Web3.
subsequent impact
Stimulated by news releases,BNB fell by more than 10% in a short period of time, from a peak of around $273 to around $227.
According to Bloomberg, CZ could have faced up to 10 years in prison, but under the plea agreement,He is not expected to be sentenced to more than 18 months in prison.The U.S. Department of Justice has not decided how long they will seek to sentence him.
Voices on Twitter generally believe that this settlement will free the crypto market from regulatory pressure from the Department of Justice, allowing Binance to enter the battle with ease, thereby promoting the next development of the crypto market. Coinbase CEO Brian Armstrong wrote on the X platform,“We now have the opportunity to usher in a new era for the crypto industry.”Many people also wrote under CZs resignation Twitter: A new era has begun, thank you for your efforts!
have to be aware of is,The institutions involved in this settlement do not include the U.S. SEC, which means that the issue of whether the tokens sold are securities has not been completely resolved. Legally, this issue has not yet been decided.This issue will be at the heart of the SEC’s case against Binance, Binance.US and Coinbase. Odaily will continue to follow up on the progress of this issue and the subsequent development of Binance’s settlement.
