Binance, the cryptocurrency giant, agrees to a fine of 4.3 billion and the resignation of its CEO for money laundering

The largest cryptocurrency platform, Binance, agreed this Tuesday to pay a fine of $4.3 billion and the resignation of its chief executive officer (CEO), Changpeng Zhao, following an accusation described as a “turning point” by the authorities of USA.

This was announced at a press conference this Tuesday by the Attorney General, Merrick Garland, the Secretary of the Treasury, Janet Yellen, the Deputy Attorney General Lisa Monaco and the President of the Commodity Futures Trading Commission, Rostin Behnam, who underlined the importance of this action for the US Government.

Binance and the CEO thus resolve – with one of the largest fines in history for a company in the United States – the accusations of non-compliance with anti-money laundering regulations, the transmission of money without a license and violation of the US sanctions regime , indicates a statement.

Zheo, a Canadian national, pleaded guilty this Tuesday in a Seattle court to an individual charge of failing to maintain an effective anti-money laundering program and will pay a fine of 50 million; A Binance representative also appeared to plead guilty on behalf of the company.

Garland emphasized that the laws prevent US financial institutions from being available to “terrorist organizations, drug traffickers and sanctioned countries that threaten public safety and national security,” so the agreement involves imposing a supervisory body.

Binance will have to regularly report its activity to authorities, review past and all suspicious transactions going forward, which will assist in investigations of cybercrime and terrorist financing, including the use of cryptocurrency platforms to support groups such as Hamas. “, said.

The biggest fine

Garland cited transactions worth about $900 million between US users. and from Iran, and others worth “millions” of dollars with users in Syria and in Ukrainian regions occupied by Russia; while Yellen cited transactions with Hamas, Palestinian Islamic Jihad, Al Qaeda and the Islamic State.

The Treasury Secretary noted the value of the agreement with Binance: it is the largest fine imposed on a money services business, the first resolution of a case agreed with a cryptocurrency platform, and also the first of its kind related to the violation of the regime of US sanctions

“Let me be clear: we are sending a message to the virtual currency sector. Today and in the future, if exchanges and financial technology companies want the tremendous benefit of being part of the American financial system and serving American customers, they must follow the rules,” Yellen stressed.

Zhao, who founded Binance in 2017 and is perhaps the most influential figure in the crypto world, faces a maximum prison sentence of 18 months and is prohibited from engaging in any way with the company until three years after a supervisory body is appointed.

FTX Collapse

The fall of CZ follows that of the other star of the crypto world, Sam Bankman-Fried, guilty of the collapse of FTX – Binance's great competitor – and of having defrauded thousands of his clients, who was found guilty on November 2 on seven charges and now awaits a sentence of several years in prison.

In fact, CZ had a lot to do with FTX's downfall, when he sold his own stake in that company and expressed concern about FTX's financial stability: Zhao's announcement caused other investors to rush out of FTX, which It caused the company to have an $8 billion deficit, forcing FTX to file for bankruptcy on November 11.

That gives an idea of the influence that Zhao came to have in the world of cryptocurrencies, which in the early years of Binance enjoyed a certain regulatory laxity that now seems to close on the main companies.