Binance CEO Changpeng Zhao shocked markets by resigning and pleading guilty to violating anti-money laundering laws, as part of a deal with the US Department of Justice (DOJ). Binance will have to pay $4.3 billion to the DOJ, but will be able to continue its operations under supervision. We take stock of this shocking news.
UPDATE 11/21 10:27 p.m. : article updated with the latest information from the DOJ televised intervention as well as the declassification of the indictment concerning Binance and Changpeng Zhao.
Binance CEO Changpeng Zhao resigns, pleads guilty
The Wall Street Journal just told us that Binance CEO Changpeng Zhao has agreed to resign from his position as part of the agreement proposed by the US Department of Justice (DOJ).
In parallel, CZ pleaded guilty to violating anti-money laundering requirementslawsuits that emanated from the US Treasury Department as well as the Commodity Futures Trading Commission (CFTC).
Moreover, Binance will indeed pay $4.3 billion to the DOJ within the framework of this same agreement. In return, the cryptocurrency exchange should theoretically continue to operate normally while allowing the American authorities to access its internal documents in order to clarify the facts with which it is accused.
Changpeng Zhao is expected to appear in Manhattan federal court this evening (i.e. afternoon in the United States) and plans to plead guilty to several charges. Changpeng Zhao Allowed to Retain Majority Stake in Binancebut he will no longer be able to hold a management position within it.
According to the Wall Street Journal, this agreement does not concern any disputes between Binance and the Securities and Exchange Commission (SEC) of the United States, which also continues the exchange.
The price of Bitcoin is down slightly following the news, and that of BNB, the native token of Binance and its ecosystem, is down 9% over one hour.
Buy cryptos on eToro
What are the allegations against Binance and CZ?
The indictment directly targets Binance, accusing the company and CZ of violating the Bank Secrecy Act from 2017 to October 2022. Negligence in the implementation of an anti-money laundering program and violation of American economic sanctions are also singled out.
The DOJ emphasizes that Binance would have hidden its international activity in the United States and therefore it is indeed it which is targetedalthough its subsidiary, Binance.US, is named in the indictment.
The prosecution reveals that CZ was aware of Binance’s activity in the United States, with more than 23% of users counted in 2017 as US residents. These revelations are supported by handwritten extracts from Changpeng Zhao, who claimed in 2019 that preventing access to American customers would have limited the growth of the platform.
Binance pleads guilty to 3 counts, while CZ accepts maximum sentence of 18 months in prison and $50 million personal fine. At the same time, a US law compliance program will be put in place, responding to the DOJ’s accusation that Binance was operating without such a program.
👉 Find our detailed article: what exactly is being criticized against CZ and Binance?
Earn up to $50 in bitcoin for the purchase of a Ledger
Binance permanently leaves the United States
The $4.3 billion payment imposed on Binance includes 2 separate payments: one of $3.4 billion destined for the Financial Crimes Enforcement Network (FCEN) and the other of $968 million to the Office of Foreign Assets Control (OFAC), namely the money laundering and sanctions agencies relating to the US Treasury Department.
At the same time, a controller from the Treasury Department will monitor Binance’s activities for a period of 5 years. And this, knowing that according to the agreement concluded between Binance and the DOJ provides that the exchange is leaving the United States for good to make way for Binance.US, its local subsidiary, to manage this market 100%.
Treasury Secretary Janet Yellen said the agreement reached was “ the most important in the history of the department ».
Finally, according to the agencies and finally on the facts alleged against the platform and Changpeng Zhao, Binance has allowed entities associated with the Islamic State of Iraq, Syria and Hamas as well as North Korea to use its platform.
“By failing to comply with its anti-money laundering and sanctions obligations, Binance has allowed a range of illicit actors to freely transact on its platform. »
👉 In similar news – The SEC files a complaint against Kraken again: what are the accusations this time?
Pre-order the 4th edition of our paper journal
Source : Wall Street Journal
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page may feature investment-related assets, products or services. Some links in this article may be affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no harm to you and you can even get a bonus using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and cannot be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to cryptoassets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Passionate about the world of decentralized finance and the new developments brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
1003 items