Leading cryptocurrency exchange Binance has agreed to pay one of the largest corporate penalties in U.S. history after a coalition of federal regulators accused the exchange of breaking sanctions and money-transmitting laws.
As part of the settlement, the company will pay $4.3 billion to the U.S. and its founder Changpeng Zhao, also known as CZ, will resign from his role and admit to felony criminal charges of money laundering brought by the U.S. Department of Justice.
The U.S. Department of Justice accused Zhao and Binance of violating the Bank Secrecy Act by not maintaining a strict anti-money laundering system. Before August 2021, the exchange allowed numerous users to trade without adequate Know Your Customer (KYC) checks with Zhao allegedly believing that requiring KYC for every users would lead to a loss of market share.
The lack of these rules also enabled U.S. users to deal with sanctioned users and criminal enterprises, processing over 100,00 transactions related to child sexual abuse, illegal narcotics and terrorism in more than without reporting any suspicious activity, according to Treasury Secretary Janet Yellen.
An independent third-party compliance monitor will oversee Binance for five years and require it to report the transactions it processed that were suspicious. The company’s CEO, Zhao, will be replaced by Richard Teng, who is the Global Head of Regional Markets.
Zhao himself agreed to pay a $50 million fine and is prohibited from “”any present or future involvement in operating or managing” Binance, with that ban ending three years after the monitor is appointed.
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- Source: https://www.cryptocompare.com/email-updates/daily/2023/nov/22/
