- Binance, the world’s largest crypto exchange, settled with US agencies for $4 billion after multi-year investigations into violations of regulations
- As part of settlement, Binance to pay $1.81 billion in 15 months and forfeit additional $2.51 billion; CEO Zhao stepping down and pleading guilty
- Settlement resolves probes by DOJ, CFTC, Treasury Dept but doesn’t end legal issues; company still faces allegations over AML controls
Binance, the world’s largest cryptocurrency exchange, has reached a settlement with several US government agencies to resolve a multi-year investigation into violations of US regulations. The settlement totals $4 billion and requires leadership changes at Binance.
Details of the Settlement
As part of the settlement, Binance has agreed to pay $1.81 billion within 15 months and forfeit an additional $2.51 billion. The company’s founder and CEO Changpeng Zhao will step down from his position, plead guilty to breaking US anti-money laundering laws, and pay a $50 million personal fine. Binance’s former chief compliance officer Samuel Lim will also face criminal charges.
Ongoing Legal Issues for Binance
The settlement resolves investigations by the US Justice Department, Commodity Futures Trading Commission, and Treasury Department. However, it does not end Binance’s legal troubles. The company still faces allegations that it failed to implement effective anti-money laundering controls and allowed the flow of illicit funds through its platform.
Leadership Changes and Remediation Efforts
With Zhao’s departure, Binance will need to appoint new leadership to oversee required remediation efforts. Zhao has been barred from any future involvement with Binance as part of his plea deal. The company must address lapses in its compliance programs that allowed lax oversight of user transactions.
The large settlement demonstrates the Biden administration’s crackdown on the cryptocurrency industry to enforce stronger controls against financial crimes. For Binance, the deal removes significant legal uncertainty but necessitates an overhaul of its business practices and compliance systems.