Binance, the World's Largest Crypto Exchange, Pleads Guilty to Money Laundering and Shall Pay $4 Billion Fine

Binance, the world's largest cryptocurrency exchange, has admitted to involvement in money laundering, unlicensed money transfers, and violating sanctions. The company has reached a settlement with investigators and agreed to pay over $4 billion.

This information is reported by the U.S. Department of Justice.

"Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in U.S. history. In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases," said U.S. Attorney General Merrick Garland.

Binance has acknowledged that it partially ignored its legal obligations for its own enrichment. The exchange's actions, in particular, allowed funds to flow to terrorists, cybercriminals, and child abusers.

"A corporate strategy that puts profits over compliance isn’t a path to riches; it’s a path to federal prosecution," said Deputy Attorney General Lisa O. Monaco.

The exchange also tolerated illegal transactions between U.S. users and users in sanctioned countries such as Iran, Cuba, Syria, and the regions of Ukraine occupied by Russia.

Binance was launched in 2017 and managed to attract a massive number of clients worldwide, with the largest share of users coming from the U.S.

Under U.S. laws, Binance was required to register with the Financial Crimes Enforcement Network (FinCEN) as a company providing financial services and to monitor whether the platform was used for money laundering.

However, as the U.S. government stated, the company did not undergo proper registration, did not implement the mandatory know-your-customer (KYC) protocols, and did not conduct systematic transaction monitoring.

Previously, it was also revealed that the CEO of the company, Changpeng Zhao, a Canadian national, pleaded guilty to failing to maintain an effective anti-money laundering program and resigned.

The agreement with the U.S. prosecutors will allow Changpeng Zhao to retain a controlling stake in Binance, but he will not be able to hold a managerial position in the company and will pay a fine of $50 million.