According to a report from Cointelegraph, United States Department of Justice officials made public that Changpeng “CZ” Zhao, the CEO of cryptocurrency exchange Binance will plead guilty to one felony charge as part of an agreement over criminal and civil cases with the exchange.
In a November 21st press conference, Attorney General Merrick Garland announced that CZ entered his plea in person in United States federal court even though living outside the country. He added that a $4.3 billion settlement with Binance and CZ would fulfill "civil regulatory enforcement actions” by government departments including the U.S. Treasury and Commodity Futures Trading Commission (CFTC).
According to Garland, Binance’s policies granted criminals partaking in illicit pursuits to move “stolen funds” through the exchange. He alleged the exchange “pretended to comply” with U.S. federal laws by providing ways for certain users to access Binance regardless of their connection to illegitimate funds.
The attorney general said the exchange would be subject to monitoring and reporting
requirements and required to file suspicious activity reports for previous transactions.
Following Garland, Treasury Secretary Janet Yellen said Binance would pay more than $3.4 billion in penalties to the Financial Crimes Enforcement Network and roughly $1 billion to the Treasury’s Office of Foreign Assets Control as part of the settlement. CFTC Chair Rostin Behnam said Binance would pay $2.7 billion in civil monetary penalties and disgorgement, CZ would pay $150 million, and former compliance chief Samuel Lin would pay $1.5 million under the proposed settlement. The Justice Department will credit roughly $1.8 billion toward the latter resolutions.
In a November 21st blog post, Binance stated that it was “pleased” to have come to a resolution with United States authorities, claiming the exchange “never faltered in upholding [its] core values of user security and safety.”
CZ announced on X that he has resigned from his position as CEO and that Binance’s global head of regional markets, Richard Teng, will now fulfill the role.
“I made mistakes, and I must take responsibility,” said CZ. “This is best for our community, for Binance, and for myself. [...] I have not had a single day of real (phone off) break for the last 6 and half years.”
CZ went on to say that he was “proud to point out” that the U.S. agencies didn’t allege Binance misappropriated user funds or engaged in market manipulation.
According to the indictment against Changpeng Zhao filed under seal on November 14th, the Binance CEO faced one charge for failing to maintain an effective Anti-Money Laundering program at the crypto exchange, which violated the Bank Secrecy Act. Court records concerning charges against Binance and CZ had been kept under seal from November 14th through 21st following motions from prosecutors in agreement with both parties.
The settlement between U.S. officials and Binance has greatly closed many of the civil and criminal investigations into the exchange dating back months. Binance still has a pending civil case with the United States Securities and Exchange Commission, which charged Binance, Binance.US and CZ for securities law violations in June.
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