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Binance and its CEO Changpeng Zhao have conceded to violations of anti-money laundering, paving the way for a comprehensive settlement with the US. Under this agreement, the cryptocurrency exchange will keep functioning while settling hefty fines.

  • Charges and Settlement Details: Binance confessed to facilitating transactions involving Hamas and other terrorist organizations. The charges they faced included: anti-money laundering, operating an unlicensed money-transmitting business, and violating US sanctions.
  • VIP Customers and Evasion Tactics: Binance and Zhao were accused of taking steps to help VIP customers bypass US laws aimed at halting the flow of illicit money globally. These strategies allegedly enabled US-based VIP users to carry out virtual currency transactions “equivalent to billions of US dollars per day.”
  • Settlement: Binance will pay $4.3B, making it one of the largest corporate settlements in US history. Specifically, the exchange is to pay a $1.8B criminal fine and forfeit $2.5B. CEO Changpeng Zhao will pay a $50M fine and step down from his role. Though Zhao could face up to 10 years in prison, he is likely to get no more than 18 months under a plea deal.
  • Bail Set: Zhao’s bail was set at a substantial $175M, a figure that his legal team claimed he was ready to post for his release. In a bid to further secure Zhao’s release, his sister pledged a California-based property valued over $5M. Furthermore, two anonymous guarantors committed an additional total of $350,000.
  • New Leadership: With Zhao stepping down, Richard Teng will take over as the new CEO. As part of their plea deal, Binance will enhance its compliance program and appoint an independent monitor for three years.
  • Aftermath and Future: The settlement marks a milestone in the ongoing scrutiny of the cryptocurrency industry. With Binance being one of the world’s largest cryptocurrency exchanges, this case represents one of the largest penalties ever imposed on a cryptocurrency organization.

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed — now it’s paying one of the largest corporate penalties in U.S. history,” said Attorney General Merrick Garland. The Justice Department continues to deliberate on the length of Zhao’s prison term.

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