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CZ Admits Guilt! Binance Faces $4.3 Billion Fine!

TraderKnows
TraderKnows
2023-12-19

Binance CEO Zhao Changpeng, also known as CZ, has admitted to the charges brought forth by the U.S. Department of Justice and has agreed to step down. In a settlement, Binance will pay a total fine of $4.3 billion, allowing the company to continue its stable operations. CZ will retain the majority of Binance's equity but will be unable to hold executive positions within the company.

Binance Founder Zhao Changpeng Agrees to Resign, Binance to Pay $4.3 Billion Fine

Binance CEO Zhao Changpeng, also known as CZ, has admitted to the charges brought forth by the U.S. Department of Justice and has agreed to step down. In a settlement, Binance will pay a total fine of $4.3 billion, allowing the company to continue its stable operations. CZ will retain the majority of Binance's equity but will be unable to hold executive positions within the company.

U.S. Department of Justice Charges Against Binance

In a document released on November 21, Binance faces three charges, including violations of anti-money laundering regulations, conspiracy to conduct unlicensed money transfers, and breaches of U.S. sanctions. The penalty involves the forfeiture of $2.5 billion and a criminal fine of $1.8 billion. The $4.3 billion fine includes $3.4 billion paid to the Financial Crimes Enforcement Network (FinCEN) and $968 million to the Department of the Treasury's sanctions office.

According to the Department of Justice, Zhao Changpeng and others are accused of violating the Bank Secrecy Act by failing to implement effective anti-money laundering measures. They are charged with intentionally violating U.S. economic sanctions and profiting from the U.S. market without implementing the required controls mandated by U.S. law.

Binance's Alleged Money Laundering Activities

In September, the Department of Justice requested all data from Binance, indicating an ongoing investigation into potential money laundering activities. According to the Department of Justice, Binance violated certain anti-money laundering (AML) and sanction regulations since the investigation began.

Court documents reveal that as early as August 2017, Zhao Changpeng and other executives "intentionally failed to register as a money services business." These executives are accused of "intentionally violating the Bank Secrecy Act by failing to implement and maintain effective anti-money laundering programs" and intentionally violating U.S. economic sanctions enacted under the International Emergency Economic Powers Act.

The U.S. prosecutors state that Binance CEO Zhao Changpeng has resigned, admitting to violating U.S. anti-money laundering and sanction laws by failing to report over 100,000 suspicious transactions related to designated terrorist organizations, including Hamas, Al-Qaeda, and ISIS in Iraq and Syria.

The U.S. Department of the Treasury states that Binance's violations include failure to prevent and report suspicious transactions involving terrorist organizations, such as Hamas, Palestinian Islamic Jihad, Al-Qaeda, and ISIS in Iraq and Syria. Court documents reveal that Binance allowed at least 1.1 million related transactions, totaling over $898 million, involving Iranian customers.

Zhao Changpeng's Admission of Guilt and Fine Settlement

Zhao Changpeng appeared in a Seattle federal court on November 21, acknowledging guilt in violating U.S. money laundering regulations. He announced his resignation as CEO and agreed to pay a total fine of $4.3 billion, covering the amount for settling civil charges brought by regulatory authorities.

From a McDonald's worker to the richest person of Chinese descent, Zhao Changpeng founded Binance in 2017, making it the world's largest cryptocurrency exchange within eight months. Binance remains the global leader in cryptocurrency exchanges, handling billions of dollars in transactions annually. The exchange has consistently expanded its global influence, often rapidly growing without obtaining prior licenses.

Similar to the plea agreement of former Bitmex CEO Arthur Hayes, who admitted to violating anti-money laundering laws and received a two-year probation, Zhao Changpeng has accepted the charges, paying a substantial fine for settlement.

赵长鹏发文

Richard Teng Assumes Role of New Binance CEO

Newly appointed Binance CEO Richard Teng emphasized the following points in his announcement:

  1. Assuring users that they can trust the company's commitment to financial strength and security.
  2. Committing to collaborate with regulatory authorities to maintain global standards, fostering innovation while providing crucial consumer protection.
  3. Jointly promoting the growth and adoption of Web3, collaborating with partners for mutual development.
Richard Teng发文

Subsequent Monitoring Measures

Binance has agreed to a total fine of $4.316 billion, including the forfeiture of over $2.5 billion and a criminal fine of approximately $1.8 billion. While Binance will continue its operations, there are new fundamental rules in place. The company will appoint an independent compliance monitor for a three-year term to improve its anti-money laundering and sanctions compliance programs. Binance has also reached settlements with the CFTC, FinCEN, and the Office of Foreign Assets Control (OFAC), providing approximately $1.8 billion for these agreements.

Following the announcement of the plea agreement, the cryptocurrency BNB, created by Binance, experienced a drop of approximately 5%. The token reached a five-month high after the U.S. Department of Justice announced the settlement with the company.

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The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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