Binance, World's Largest Crypto Exchange, Pleads Guilty to Money Laundering

In a groundbreaking development, Binance Holdings Limited, the globe's largest crypto exchange, and its CEO, Changpeng Zhao, have pleaded guilty to violating anti-money laundering (AML) regulations in the United States. The U.S. Attorney's Office, Western District of Washington, announced this significant move, aiming to resolve investigations into breaches of the International Emergency Economic Powers Act (IEEPA) and the Bank Secrecy Act (BSA).

Binance has agreed to a staggering $4 billion-plus settlement to conclude the probe. Following the admission of guilt, Zhao stepped down as CEO. The plea reveals that Zhao acknowledged violating the BSA and neglecting to establish an effective AML program.

This resolution stems from coordinated efforts by the U.S. Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The charges make it one of the most significant corporate resolutions with criminal implications.

Binance faced allegations of lacking effective AML controls, leaving it susceptible to money laundering. Janet L. Yellen, Secretary of the Treasury, accused the exchange of prioritizing profits over legal responsibilities. Yellen asserted that Binance's "willful failures" facilitated funds to reach terrorists, cybercriminals, and child abusers through its platform.

Under the guilty plea, Binance will forfeit $2.51 billion and pay a criminal fine of $1.81 billion, totaling a massive $4,316,126,163 penalty. The exchange will undergo three years of independent compliance monitoring, committing to enhancing its AML framework.

Zhao, with an estimated fortune exceeding $23 billion, faces a substantial $200 million financial penalty. This includes a $50 million fine and $150 million in civil penalties.

Attorney General Merrick B. Garland emphasized that Binance's success was partly due to violating regulations. He highlighted the Justice Department's recent success in prosecuting CEOs from major crypto exchanges, sending a clear message that the Department is prepared to combat technology-driven law violations.