The world’s largest cryptocurrency exchange is penalized after breaking laws, including an anti-money laundering law.
The CEO of Binance has pleaded guilty and will step down after charges and penalties came through.
The company must pay a staggering $4.3 billion (around ₱239 billion; 55.61 conversion rate) as penalty for breaking U.S. anti-money laundering and sanction laws, including the Bank Secrecy Act. Connected to that is the company’s failure to report over 100,000 suspicious transactions with organizations described by the U.S. as terrorist groups, such as Hamas and the Islamic State of Iraq and Syria.
“Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges. Binance also did more than just fail to comply with federal law. It pretended to comply,” said U.S. Attorney General Merrick Garland, per Reuters.
Changpeng Zhao, founder and CEO of Binance, pleaded guilty in a Seattle court and must pay a total of $50 million personally as part of the settlement. But as a whole, the company must pay the first $1.81 billion within 15 months, followed by the remaining $2.5 billion, also part of the deal.
The Justice Department is seeking an 18-month prison sentence for Zhao, which is the maximum suggested sanction under federal guidelines. Some of the charges are both criminal and civil.
Binance employees and officers alleged that the platform facilitated “potentially illegal activities,” and the company didn’t have protocols to flag transactions with money laundering risks.
Despite the situation, Binance is unlikely to go down the drain considering the deal. Zhao is likely to maintain his ownership stake in the company as well.
Binance posted on its official website that it is confident to “emerge as a stronger company” as it lays “the foundation for the next 50 years.”