Binance has reached an agreement to pay $4.3 billion to settle a prolonged investigation by the US Department of Justice (DoJ). As part of this settlement, the crypto exchange’s founder, Changpeng “CZ” Zhao, is stepping down as CEO and has pleaded guilty to breaching anti-money laundering regulations.
This agreement, which involves the DoJ, the Treasury Department, and the Commodity Futures Trading Commission (CFTC), addresses allegations that Binance failed to maintain a proper anti-money laundering program, operated an unlicensed money-transmitting business, and violated sanctions laws, as detailed in a court filing unsealed on Tuesday. The exchange will forfeit $2.5 billion to the government and pay an additional fine of $1.8 billion.
Zhao has pleaded guilty to violating the Bank Secrecy Act and causing a financial institution to do the same. He will also pay a $50 million fine, resign as CEO, and be barred from any future involvement with Binance, which he founded in 2017. Former chief compliance officer Samuel Lim is also facing charges related to this settlement.
Attorney General Merrick Garland stated, “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 US history.”
Binance has been under scrutiny by the Justice Department for several years. In March, the CFTC filed civil charges against the company, alleging that it had failed to perform required identity verification checks and implement adequate compliance controls to prevent money laundering on its platform.
Additionally, Binance and Zhao are facing a lawsuit from the SEC, which alleges multiple violations of securities laws and claims that the exchange engaged in an “extensive web of deception.”