Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Zenger
Zenger
National
Neil Dennis

World’s Largest Crypto Exchange Hit With Record Fine, CEO Resigns

Binance, the world’s largest cryptocurrency exchange, was fined Tuesday $4.3 billion after CEO Changpeng Zhao pleaded guilty to failing to comply with US anti-money laundering and funding of terrorism laws. PHOTO BY VADIM ARTYUKIN/UNSPLASH

Binance, the world’s largest cryptocurrency exchange, was fined Tuesday $4.3 billion after CEO Changpeng Zhao pleaded guilty to failing to comply with US anti-money laundering and funding of terrorism laws.

At a press conference announcing the record fine, Attorney General Merrick B. Garland said: “As CEO of Binance, Zhao willfully violated federal law that requires financial institutions to guard against money laundering and terrorist financing.”

The exchange was also found to have failed to report transactions with websites that sell child sexual abuse material. It also received proceeds from cybercrime in the form of ransomware payments.

Binance, the world’s largest cryptocurrency exchange, was fined Tuesday $4.3 billion after CEO Changpeng Zhao pleaded guilty to failing to comply with US anti-money laundering and funding of terrorism laws. PHOTO BY VADIM ARTYUKIN/UNSPLASH

Treasury Secretary Janet Yellen added: “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”

Binance will pay the majority of the fine, while China-born Canadian national Zhao will pay $50 million.

The guilty plea was entered in person by Zhao in the US District Court for the Western Division of Washington, following a four-year investigation by the Commodity Futures Trading Commission (CFTC) and other law agencies.

Binance, whose native token is BUSD ($BUSD), was found to have failed to report more than 100,000 suspicious transactions from groups and organizations including Hamas, which is currently embroiled in a conflict in Israel. Other groups included Al Qaeda and the Islamic State of Iraq and Syria, the investigation found.

Binance, the world’s largest cryptocurrency exchange, was fined Tuesday $4.3 billion after CEO Changpeng Zhao pleaded guilty to failing to comply with US anti-money laundering and funding of terrorism laws. PHOTO BY VADIM ARTYUKIN/UNSPLASH

Zhao posted on social media: “Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.”

Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.

Binance is no longer a baby. It is…

— CZ 🔶 Binance (@cz_binance) November 21, 2023

While already under scrutiny, the CFTC found Binance employees were taking a lax approach to AML laws. Chief compliance officer Samuel Lim in 2019 “explained to a colleague that terrorists usually send ‘small sums’, as ‘large sums’ constitute money laundering,” said the CFTC when it filed its lawsuit in March.

Although the largest fine to be slapped on a cryptocurrency exchange for AML violations, it was not the first. Last year the co-founders of BitMex settled for $100 million for “failing to establish, implement and maintain an anti-money laundering program.”
Produced in association with Benzinga

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.