Binance CEO to Plead Guilty, Settle for $4.3 Billion in Federal Cases
Summary:
Changpeng "CZ" Zhao, CEO of Binance, will plead guilty to a felony charge as part of a $4.3 billion settlement for civil regulatory enforcement actions with the US federal government. The settlement was reached with several organizations, including the U.S. Treasury and Commodity Futures Trading Commission (CFTC), following accusations that Binance facilitated illicit activities and failed to adhere to U.S. federal laws. As part of the settlement, Binance will pay above $3 billion to the FinCEN and approximately $1 billion to the Office of Foreign Assets Control (OFAC). The crypto exchange still faces a pending civil case with the U.S. Securities and Exchange Commission (SEC).
U.S. Department of Justice authorities have confirmed that Changpeng "CZ" Zhao, the CEO of Binance, will agree to a guilty plea on a single felony count to settle his criminal and civil cases with the currency exchange platform. The announcement was made by Attorney General Merrick Garland at a press conference held on November 21, who added that CZ entered his guilt plea in a U.S. federal court, despite living overseas. The settlement agreement involves $4.3 billion to be paid by Binance and CZ to address civil regulatory infractions identified by federal agencies, including the U.S. Treasury and Commodity Futures Trading Commission (CFTC).
Garland indicated that Binance's practices permitted the transfer of "illicitly acquired" assets via the exchange platform. He claimed that the exchange simulated compliance with federal laws by enabling some clients, who were linked to illicit funds, access to Binance. Going forward, the Attorney General stated that the exchange would be supervised and obliged to submit activity reports for earlier transactions.
Garland criticized Binance for prioritizing its earnings over American safety and pointed out that those employing new technology to defy the law are lawbreakers, not innovators.
Subsequent to Garland's statement, Treasury Secretary Janet Yellen informed journalists that Binance would hand over more than $3 billion to the Financial Crimes Enforcement Network (FinCEN) and approximately $1 billion to the Treasury's Office of Foreign Assets Control (OFAC) as part of the settlement agreement.
The indictment against CZ, which was sealed on November 14, accused Binance's CEO of failing to maintain an efficient anti-money laundering policy on the crypto exchange, in breach of the Bank Secrecy Act. The documents related to the charges against Binance and CZ were kept confidential from November 14 until November 21, following a consensus between the prosecution and both parties.
The agreement between U.S. authorities and Binance has mainly put to rest numerous civil and criminal probes into the exchange's operations over recent months. However, Binance continues to face an ongoing civil suit filed by the U.S. Securities and Exchange Commission (SEC), which in June accused Binance, Binance.US, and CZ of securities law contraventions.
Further updates on this unfolding story will be provided as additional information comes to light.
Published At
11/21/2023 8:59:11 PM
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