Cryptocurrency exchange Binance CEO Changpeng Zhao admits money laundering and resigns, total fine exceeds 630 billion yen

Binance, a major virtual currency exchange, has acknowledged violating the Bank Secrecy Act by neglecting money laundering measures and agreed to pay a total of $4.3 billion (approximately 630 billion yen) in fines. CEO Changpeng Zhao, who was also charged with a crime, also pleaded guilty and resigned as CEO.

Office of Public Affairs | Binance and CEO Plead Guilty to Federal Charges in $4B Resolution | United States Department of Justice

Binance Announcement: Reaching Resolution With US Regulators | Binance Blog

Binance is a virtual currency exchange founded in 2017, and has quickly grown to become the world's largest, thanks in part to the acquisition of many American users.

Financial services businesses that provide services to Americans are required to register with the Treasury Department's Financial Crimes Enforcement Unit (FinCEN) and implement anti-money laundering measures (AML), according to court documents. Binance ignores this. In addition, even though the transaction matching system was aware that the transaction was in violation of the International Emergency Economic Powers Act (IEEPA), a law that establishes economic sanctions, American customers It is said that they did not introduce any mechanism that would prevent them from doing business with other companies. These actions constitute a violation of the Bank Secrecy Act.

Furthermore, instead of complying with American law, they blocked American users from Binance and established an exchange for the United States, Binance.US. However, in reality, VIP customers remained connected to Binance, and CEO Zhao and others reportedly helped VIP customers establish new offshore corporate accounts and transfer assets.

The Justice Department has been conducting a multi-year investigation and is seeking to either file criminal charges against CEO Zhao, who lives in the United Arab Emirates (UAE), or to pay more than $4 billion (more than 590 billion yen) to resolve the investigation. I did.

The Department of Justice demands Binance to pay over 590 billion yen, the largest-ever investigation into a virtual currency exchange is finally over - GIGAZINE

Ultimately, Binance and CEO Zhao pleaded guilty.

Mr. Zhao resigned as CEO, and Binance forfeited $2,510,650,588 (approximately 372 billion yen) and was fined a criminal fine of $1,805,475,575 (approximately 268 billion yen) for a total of $4,316,126,163 (approximately 640 billion yen). We also agreed to conduct independent compliance monitoring for three years to improve and strengthen our anti-money laundering and sanctions compliance programs. Binance has agreed to resolve the issue with the US Commodity Futures Trading Commission, FinCEN, and the Treasury Department's Office of Foreign Assets Control, and the Department of Justice will contribute $1.8 billion (approximately 267 billion yen) to this resolution.

Although Binance did not timely and voluntarily disclose its misconduct, it has gained a certain level of trust by cooperating with investigations and taking measures to improve its compliance program, and the fine was reduced by 20% from the lower limit set by the sentencing guidelines. It has been. Still, it is said to be one of the highest fines for virtual currency.

Binance also issued a news release in response to this decision, stating that although they made wrong decisions during their growth process, they have taken responsibility for their past and have been reborn. Mr. Zhao will be replaced as CEO by Richard Teng , who was previously global head of regional markets.

Mr. Zhao said, ``I made a mistake and must take responsibility. This is the best choice for the community, for Binance, and for myself.'' Mr. Zhao has not taken any vacation during the past six and a half years, and plans to become an investor in the blockchain, Web3, DeFi, AI, and biotechnology fields in the future.

in Note, Posted by logc_nt