Binance and its CEO Changpeng "CZ" Zhao, agreed to plead guilty to violating anti-money laundering and sanction laws.
Binance admitted that after its launch in 2017, it focused on attracting a large number of users from all over the world including the US. Binance failed to register with FinCEN as a money services business. Binance started blocking US users in 2019 and formed a US exchange for its US users in 2019. It however continued to allow US users to trade on its international exchange by encouraging the use of VPNs to bypass geolocation blocks. It also encouraged its US-based VIP users to register offshore entities that would act as proof of not being located in the US.
Investigations by FinCEN established that Binance failed to report over 100,000 suspicious transactions.
Further, FinCEN claims unreported transactions included transactions associated with terrorist groups, including Al Qaeda and ISIS; transactions of millions of dollars associated with at least 24 different ransomware strains; transactions associated with child sexual abuse platforms, such as Dark Scandals; and transactions to and from dark web marketplaces, such as Hydra.
Binance also admitted it allowed users from sanctioned jurisdictions to trade on its platform and processed trades between Americans and users believed to be in Iran valued at $899 million between January 2018 and May 2022.
Binance agreed to pay $4.3 billion, while Zhao will step down as CEO and pay a $150 million fine. Zhao also faces a maximum prison sentence of 18 months under federal sentencing guidelines. He will be sentenced at a later date.
CZ also announced Binance's new CEO on X and assured the safety of funds their users have on the platform.
His bum is not safu!