Binance pays $4.3 billion to settle money laundering charges

The US Department of Justice has forced a penalty of more than $4 billion from Binance to settle a criminal investigation that caught the world’s biggest cryptocurrency exchange and its co-founder.

Binance pays $4.3 billion to settle charges

The proposed deal between Binance and the Department of Justice  (DOJ) ends a multiyear investigation by US prosecutors that has focused on bank fraud, sanctions violations and money laundering.

Changpeng Zhao has also been forced to step down as CEO, the cryptocurrency exchange he founded, as part of the settlement between the US agencies.

“I made mistakes, and I must take responsibility,” Zhao wrote in a post to X. “This is best for our community, for Binance, and for myself.”

In a press statement, Binance said it would take responsibility for not having appropriate compliance controls. “When Binance first launched, it did not have compliance controls adequate for the company that it was quickly becoming, and it should have.”

Zhao’s departure as CEO will not be a complete separation from Binance. The founder will remain its majority shareholder, and a resource for “consultation on historical areas of the business,” the company said.

It added that Binance executive Richard Teng would succeed Zhao as CEO.

As part of the settlement, Zhao appeared in federal court in Seattle and pleaded guilty to anti-money laundering and sanctions violations brought by the DOJ.

Additionally, Binance settled charges with the DOJ and Commodities Futures Trading Commission; the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), which will give the Treasury Department access to Binance’s books and records under the terms of a five-year monitorship.

“Because of the crimes committed, Binance became the largest cryptocurrency exchange in the world,” Merrick Garland, the US Attorney General, said during a press conference. “Now, Binance has paid one of the largest corporate penalties in US history.”

The Treasury Department said in a statement that it had taken “unprecedented action” to hold it accountable for violations of US anti-money laundering laws.

It alleged that Binance had failed to prevent and report “suspicious transactions with terrorists,” citing both Al Qaeda and ISIS.

The settlement comes with a $3.4 billion penalty to FinCEN and $968 million to OFAC, as well as compliance requirements and monitoring for a period of five years.

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