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U.S. Authorities Reach $4.3 Billion Agreement with Binance

The U.S. Department of Justice announced that Binance’s CEO, Changpeng “CZ” Zhao, has agreed to plead guilty to a felony charge as part of a resolution involving both criminal and civil cases related to the exchange.

During a press briefing on November 21, Attorney General Merrick Garland revealed that CZ personally entered his plea in a U.S. federal court, despite residing outside the country. He outlined a $4.3 billion settlement covering both Binance and CZ, addressing “civil regulatory enforcement actions” from various government agencies, such as the U.S. Treasury and the Commodity Futures Trading Commission (CFTC).

Garland accused Binance of facilitating individuals involved in unlawful activities to transfer “stolen funds” through their platform. He alleged that the exchange falsely claimed compliance with U.S. federal laws by providing access to specific users, despite their connection with illicit funds. As part of the settlement, the exchange will undergo stringent monitoring and reporting measures and must submit suspicious activity reports for previous transactions.

“Binance prioritized its profits over the safety of the American people,” Garland stated. “Using new technology to break the law does not make you a disruptor, it makes you a criminal.”

CZ has agreed to pay a $50 million fine.

Zhao admitted guilt for breaching the Bank Secrecy Act and prompting a financial institution to also violate this regulation, as per additional documentation. The imposed fine will offset a portion of his debt owed to the Commodity Futures Trading Commission, as detailed in the U.S. Department of Justice filing.

As part of the agreement, Binance must appoint an independent compliance overseer for three years and regularly update the U.S. government on its adherence to regulations, in addition to facing the imposed penalties. Zhao is prohibited from any present or future role in directing or overseeing Binance operations, with this restriction lifted three years after the overseer’s appointment.

The conclusion of the Binance case signifies another significant victory for the U.S. government in its actions against major cryptocurrency entities. This follows shortly after FTX founder Sam Bankman-Fried was found guilty of fraud and conspiracy allegations related to his crypto exchange.

Read more about it here.

Binance has issued a comprehensive statement, stating:

“While Binance is not flawless, it has aimed to safeguard users since its early days as a small startup and has made significant efforts to invest in security and compliance. However, when Binance initially launched, it lacked adequate compliance controls for the rapidly growing company it was becoming, which it should have had. Binance expanded globally at an incredibly fast pace, in an emerging industry undergoing early-stage regulation, and made misguided decisions along the way. Today, Binance takes accountability for this past phase.”

“Equally vital, we have consistently upheld our core principles of user security and safety. We take our responsibility as a custodian seriously and maintain a 1:1 backing for every user asset. This means users can withdraw 100 percent of their assets from the platform at any time. Importantly, in our resolutions with U.S. agencies:

  • There is no allegation that Binance misappropriated any user funds.
  • There is no allegation that Binance engaged in any market manipulation.”

Read the full statement here.

Additionally, CZ’s statement from X can be read below:

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