The penalties levied upon the cryptocurrency exchange include $3.4bn from the US Department of the Treasury's Financial Crimes Enforcement Network and $968m from the Office of Foreign Assets Control
Binance CEO Changpeng Zhao and the company plead guilty for violating US federal laws. (Credit: Ben McShane/Web Summit via Sportsfile/Wikimedia Commons)
Cryptocurrency exchange Binance and its CEO Changpeng Zhao agreed to plead guilty for violating the US Bank Secrecy Act and International Emergency Economic Powers Act apart from failing to register the firm as a money transmitting business.
In this regard, Binance will pay $4.3bn in penalties to the US Justice Department, along with forfeiture.
The penalties include $3.4bn from the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and $968m from the Office of Foreign Assets Control (OFAC).
FinCEN’s settlement agreement also imposes a five-year monitorship and mandates significant compliance undertakings, including the assurance of Binance’s complete exit from the US.
Under the OFAC’s settlement agreement, Binance will be required to abide by a series of strict sanctions compliance obligations, including complete cooperation with the monitorship supervised by FinCEN.
According to the US Department of the Treasury, the cryptocurrency exchange allowed a range of illicit actors to freely transact on the platform by not complying with anti-money laundering (AML) and sanctions obligations.
US Secretary of the Treasury Janet Yellen said: “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its wilful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.
“Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime, or face the consequences.”
Established in 2017, Binance enables users to trade in cryptocurrency. It is said to be the world’s largest virtual currency exchange which is responsible for an estimated 60% of centralised virtual currency spot trading.