KEY POINTS
- Binance settled with the DOJ and other U.S. agencies on Nov. 21
- The crypto exchange paid around $4.3 billion in penalty
- Binance also appointed a new CEO to replace Changpeng Zhao who was forced to resign as part of the deal
Weeks before the historic $4.3 billion settlement with the U.S. Department of Justice (DOJ), Binance executives tipped off VIP traders and market makers of the matter at a dinner it hosted in Singapore, according to a report.
In September, Binance hosted a private dinner at the posh members-only club in Singapore called 1880 where several dozens of market makers dubbed VIPs attended, Bloomberg reported, citing "several attendees, who asked not to be identified discussing the private gathering" as sources.
Then-incoming Binance CEO Richard Teng reportedly mingled with guests at the gathering while then-CEO Changpeng Zhao was not around.
Aside from feasting on "American Angus beef and bucatini with Australian truffles" at the dinner, Binance informed the attendees that it would survive its legal troubles in the U.S.
Later during the dinner, Binance officials were asked how much the firm would pay to the DOJ and other U.S. authorities to settle its problems, including raising as much as $4 billion to pay for the penalty.
Some VIPs who were at the event left convinced that Binance would easily afford the settlement, including the billions of dollars worth of penalty.
As per the report, a Binance spokesperson confirmed the dinner but said the "depiction of the event was inaccurate" and declined to "identify which aspects were wrong."
It is worth noting that the alleged gathering happened in September while Binance's settlement with the DOJ took place on Nov. 21, roughly a couple of months after.
"Binance became the world's largest cryptocurrency exchange in part because of the crimes it committed — now it is paying one of the largest corporate penalties in U.S. history," Attorney General Merrick B. Garland said.
"In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world's largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: Using new technology to break the law does not make you a disruptor, it makes you a criminal," he added.
U.S. Secretary of Treasury Janet Yellen said in a statement at the time that "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," she added. "Today's historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries and crime or face the consequences."
