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Binance, the largest cryptocurrency exchange in the world, has agreed to a huge fine of $4.3 billion for admitting that it is guilty of having violated US money laundering and sanction laws. One of the largest ever criminal settlements in American history was concluded on Friday when U.S. District Judge Richard Jones approved this agreement, according to Bloomberg.
Changpeng Zhao, Binance’s founder, admitted it knowingly let Hamas and other terrorist groups transact on its platform, thus exposing it to financial system exploitation as well as abuse. These charges follow a prolonged survey by US prosecutors and regulators who accused the exchange of illegal activities in America and evading supervision.
As part of the deal, another organization would also monitor whether Binance complied with the agreement for a period of up to five years. Although no one has been appointed as the monitor, it is believed that Sullivan & Cromwell, a New York-based law firm, will take up this role.
Binance Deputy General Counsel Josh Eaton told the court that the company is fully accountable for its past conduct and the reason why we are here today. He also mentioned that the company was pleased with itself over the progress made in enhancing its compliance capabilities during those few years.
The exchange was aware of its obligations under US laws but Judge Jones noted the company ignored all of them for selfishness. He said that the main objective was to stop Binance and other similar corporations from getting involved in such actions in the future as well as protect their customers.
Binance Faces Uncertain Future
Zhao, who established Binance in 2017 and became one of the richest people in crypto, also pled guilty to the allegations, and a fine of $50 million was agreed upon by him. In addition, he resigned as CEO of Binance and an acting chief was appointed. Zhao is likely to get no more than 18 months imprisonment even though he could have gotten up to 10 years. His sentence will be pronounced in April.
This deal is a big setback for Binance, which has been under increasing regulatory inspection and pressure from all parts of the world. The exchange has been prohibited or limited by different countries like the United Kingdom, Japan, Germany, Canada, etc. Customers and rival companies have sued the exchange for numerous claims like market rigging, fraud, and stealing.
The exchange claims to have more than 170 million users and handles an excess of $9 billion in daily trading volume. It provides various services ranging from spot and futures trading, peer-to-peer lending, and decentralized finance to non-fungible tokens. Also, Binance Coin (BNB)—Binance’s own blockchain and digital currency— is ranked number three in terms of market capitalization.
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